0001493152-16-012369.txt : 20160815 0001493152-16-012369.hdr.sgml : 20160815 20160815113602 ACCESSION NUMBER: 0001493152-16-012369 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 55 CONFORMED PERIOD OF REPORT: 20160630 FILED AS OF DATE: 20160815 DATE AS OF CHANGE: 20160815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Immune Therapeutics, Inc. CENTRAL INDEX KEY: 0001559356 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 593226705 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-54933 FILM NUMBER: 161830930 BUSINESS ADDRESS: STREET 1: 37 NORTH ORANGE AVENUE STREET 2: SUITE 607 CITY: ORLANDO STATE: FL ZIP: 32801 BUSINESS PHONE: (888) 613-8802 MAIL ADDRESS: STREET 1: 37 NORTH ORANGE AVENUE STREET 2: SUITE 607 CITY: ORLANDO STATE: FL ZIP: 32801 FORMER COMPANY: FORMER CONFORMED NAME: TNI BIOTECH, INC. DATE OF NAME CHANGE: 20121001 10-Q 1 form10-q.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2016

 

OR

 

[  ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

 

From the transition period from ___________ to ____________

 

Commission File Number __________________

 

IMMUNE THERAPEUTICS, INC.

(Exact name of small business issuer as specified in its charter)

 

Florida   59-3226705
(State or other jurisdiction of   (IRS Employer
incorporation or organization)   Identification No.)

 

37 North Orange Ave, Suite 607, Orlando, FL 32801

(Address of principal executive offices)

 

888-613-8802

(Issuer’s telephone number)

 

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes [X] No [  ].

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ].

 

Indicate by a check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

  Large Accelerated Filer [  ]   Accelerated Filer [  ]
       
  Non-Accelerated Filer [  ]   Smaller Reporting Company [X]

 

Indicate by a check mark whether the company is a shell company (as defined by Rule 12b-2 of the Exchange Act: Yes [  ] No [X]

 

As of August 12, 2016 there were 220,989,542 shares of Common Stock outstanding.

 

 

 

   
   

 

TABLE OF CONTENTS

 

PART I FINANCIAL STATEMENTS
     
Item 1 Financial Statements  5
     
Item 2 Management’s Discussion and Analysis of Financial Conditions and Results of Operations  21
     
Item 3 Quantitative and Qualitative Disclosures About Market Risk  31
     
Item 4 Controls and Procedures  31
     
PART II OTHER INFORMATION
     
Item 1 Legal Proceedings  32
     
Item 1A Risk Factors  
     
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds  32
     
Item 3 Default upon Senior Securities  32
     
Item 4 Mine Safety Disclosures  33
     
Item 5 Other Information  33
     
Item 6 Exhibits  33

 

  2 
   

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Certain statements contained or incorporated by reference in this Quarterly Report on Form 10-Q are considered forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) concerning our business, results of operations, economic performance and/or financial condition, based on management’s current expectations, plans, estimates, assumptions and projections. Forward-looking statements are included, for example, in the discussions about:

 

strategy;
   
new product discovery and development;
   
current or pending clinical trials;
   
our products’ ability to demonstrate efficacy or an acceptable safety profile;
   
actions by the FDA and other regulatory authorities;
   
product manufacturing, including our arrangements with third-party suppliers;
   
product introduction and sales;
   
royalties and contract revenues;
   
expenses and net income;
   
credit and foreign exchange risk management;
   
liquidity;
   
asset and liability risk management;
   
the outcome of litigation and other proceedings;
   
intellectual property rights and protection;
   
economic factors;
   
competition; and
   
legal risks.

 

Any statements contained in this report that are not statements of historical fact may be deemed forward-looking statements. Forward-looking statements generally are identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “aims,” “plans,” “may,” “could,” “will,” “will continue,” “seeks,” “should,” “predict,” “potential,” “outlook,” “guidance,” “target,” “forecast,” “probable,” “possible” or the negative of such terms and similar expressions. Forward-looking statements are subject to change and may be affected by risks and uncertainties, most of which are difficult to predict and are generally beyond our control. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any forward-looking statement in light of new information or future events, except as required by law, although we intend to continue to meet our ongoing disclosure obligations under the U.S. securities laws and other applicable laws.

 

We caution you that a number of important factors could cause actual results or outcomes to differ materially from those expressed in, or implied by, the forward-looking statements, and therefore you should not place too much reliance on them. These factors include, among others, those described herein, under “Risk Factors” and elsewhere in this Annual Report and in our other public reports filed with the Securities and Exchange Commission. It is not possible to predict or identify all such factors, and therefore the factors that are noted are not intended to be a complete discussion of all potential risks or uncertainties that may affect forward-looking statements. If these or other risks and uncertainties materialize, or if the assumptions underlying any of the forward-looking statements prove incorrect, our actual performance and future actions may be materially different from those expressed in, or implied by, such forward-looking statements. We can offer no assurance that our estimates or expectations will prove accurate or that we will be able to achieve our strategic and operational goals.

 

Any statements contained in this report that are not statements of historical fact may be deemed forward-looking statements. Forward-looking statements generally are identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “aims,” “plans,” “may,” “could,” “will,” “will continue,” “seeks,” “should,” “predict,” “potential,” “outlook,” “guidance,” “target,” “forecast,” “probable,” “possible” or the negative of such terms and similar expressions. Forward-looking statements are subject to change and may be affected by risks and uncertainties, most of which are difficult to predict and are generally beyond our control. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any forward-looking statement in light of new information or future events, except as required by law, although we intend to continue to meet our ongoing disclosure obligations under the U.S. securities laws and other applicable laws.

 

  3 
   

 

Forward-looking statements are based on information we have when those statements are made or management’s good faith belief as of that time with respect to future events, and are subject to significant risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

 

our lack of operating history;
   
our current and future capital requirements and our ability to satisfy our capital needs;
   
our inability to keep up with industry competition;
   
interpretations of current laws and the passages of future laws;
   
acceptance of our business model by investors and our ability to raise capital;
   
our drug discovery and development activities may not result in products that are approved by the applicable regulatory authorities. Even if our drug candidates do obtain regulatory approval they may never achieve market acceptance or commercial success;
   
our reliance on key personnel, including our ability to attract and retain scientists;
   
our reliance on third party manufacturing, some of which is outside the United States and may therefore be subject to political, economic and other uncertainties, to supply drugs for clinical trials and sales;
   
our limited distribution organization with no sales and marketing staff;
   
our being subject to product liability claims;
   
our reliance on key personnel, including our ability to attract and retain scientists;
   
legislation or regulation that may increase the cost of our business or limit our service and product offerings;
   
risks related to our intellectual property, including our ability to adequately protect intellectual property rights;
   
risks related to government regulation, including our ability to obtain approvals for the commercialization of some or all of our drug candidates, and ongoing regulatory obligations and continued regulatory review which may result in significant additional expense and subject us to penalties if we fail to comply with applicable regulatory requirements; and
   
our ability to obtain regulatory approvals in foreign jurisdictions to allow us to market our products internationally.

 

Moreover, new risks regularly emerge and it is not possible for our management to predict or articulate all risks we face, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements. All forward-looking statements included in this prospectus are based on information available to us on the date of this Annual Report. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this Annual Report.

 

JUMPSTART OUR BUSINESS STARTUPS ACT

 

We qualify as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue and did not have such amount as of December 31, 2015, the last day of our last fiscal year. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.

 

As an emerging growth company, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:

 

being permitted to present only two years of audited financial statements and only two years of related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this annual report;
   
  not being requested to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley Act”);
   
  reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and
   
  exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

 

We will remain an emerging growth company until the earliest to occur of: (i) our reporting $1 billion or more in annual gross revenues; (ii) the end of fiscal year 2019; (iii) our issuance, in a three year period, of more than $1 billion in non-convertible debt; and (iv) the end of the fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million on the last business day of our second fiscal quarter

 

  4 
   

 

PART I FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

IMMUNE THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   June 30, 2016   December 31, 2015 
   (Unaudited)      (Audited) 
ASSETS          
Current Assets:          
Cash and cash equivalents  $64,289   $23,149 
Accounts receivable   2,661    16,197 
Prepaids and other current assets   11,272    - 
Total current assets   78,222    39,346 
           
Fixed Assets:          
Computer equipment, net of accumulated depreciation of $7,312 and $6,331 respectively   701    1,682 
           
Deposits   200    200 
           
Total assets  $79,123   $41,228 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
           
Current Liabilities:          
Accounts payable  $1,517,788   $1,924,672 
Accrued liabilities   2,030,559    1,281,039 
Current portion of notes payable   3,457,436    2,793,701 
           
Total current liabilities   7,005,783    5,999,412 
           
Non-current liabilities:          
Notes payable, less current portion   -    - 
Total non-current liabilities   -    - 
Total liabilities   7,005,783    5,999,412 
           
Commitments and Contingencies (Note 10)          
           
Stockholders’ Deficit:          
Common stock - par value $0.0001; 500,000,000 shares authorized; 214,447,611 and 174,850,047 shares issued and outstanding respectively   21,445    17,485 
Additional paid in capital   354,333,473    343,434,786 
Stock issuances due   1,275,838    1,140,303 
Prepaid services   (1,983,024)   (660,417)
Accumulated deficit   (358,319,891)   (347,789,889)
           
Deficit attributable to common shareholders   (4,672,159)   (3,857,732)
Non-controlling interest   (2,254,501)   (2,100,452)
Total stockholders’ deficit   (6,926,660)   (5,958,184)
Total liabilities and stockholders’ deficit  $79,123   $41,228 

 

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

 

  5 
   

 

IMMUNE THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

   Three Months ended   Six Months ended 
   June 30, 2016   June 30, 2015   June 30, 2016   June 30, 2015 
                 
Revenues, net  $-   $5,648   $3,463   $7,718 
                     
Operating expenses                    
Selling, general and administrative   893,917    443,585    1,833,258    845,572 
Research and development expense   67,262    414,492    48,420    591,650 
Stock issued for services G&A   1,194,761    1,450,334    3,178,598    3,611,893 
Warrant valuation   490,355    -    2,568,554    - 
Depreciation and amortization expense   434    148,726    981    297,452 
Total operating expenses   2,646,729    2,457,137    7,629,811    5,346,567 
                     
Loss from operations   (2,646,729)   (2,451,489)   (7,626,348)   (5,338,849)
                     
Other income (expense):                    
Interest expense   (1,051,576)   (50,711)   (1,353,020)   (68,757)
Loss on settlement of debt   (340,343)   (88,445)   (1,704,683)   (88,445)
Total other income (expense)   (1,391,919)   (139,156)   (3,057,703)   (157,202)
                     
Net (loss)  $(4,038,648)  $(2,590,645)  $(10,684,051)  $(5,496,051)
Net (loss) attributable to non-controlling interest   (109,929)   (138,891)   (154,049)   (262,956)
Net (loss) attributable to common shareholders  $(3,928,719)  $(2,451,754)  $(10,530,002)  $(5,233,095)
                     
Basic and diluted loss per share attributable to common shareholders  $(0.02)  $(0.02)  $(0.05)  $(0.04)
                     
Weighted average number of shares outstanding   207,229,469    147,387,763    199,076,428    142,563,007 

  

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

  6 
   

 

IMMUNE THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE PERIOD ENDED JUNE 30, 2016

(Unaudited)

 

   Common Stock   Additional Paid   Stock to   Prepaid     Accumulated   Non-Controlling     
   Shares   Amount   in Capital   Be Issued   Services     Deficit   Interest   Total 
                                   
Balance, December 31, 2015   174,850,047   $17,485   $343,434,786   $1,140,303   $(660,417 )   $(347,789,889)  $(2,100,452)  $(5,958,184)
                                           
Issuance of common stock for prepaid services   23,493,000    2,349    4,518,321    (19,466)   (2,862,535 )    -    -    1,638,669 
                                           
Amortization of prepaid services   -    -    -    -    1,539,928      -    -    1,539,928 
                                           
Issuance of common stock for interest expense   896,296    90    148,910    -      -    -    -    149,000 
                                           
Issuance of common stock for legal fees   150,000    15    22,485                          22,500 
                                           
Issuance of common stock in exchange for debt   14,433,268    1,444    2,907,814    155,001           -    -    3.064,259 
                                           
                                           
Debt discount             682,665                          682,665 
                                           
Issuance of common stock for cash and exercise of warrants   625,000    62    49,938    -    -      -    -    50,000 
                                           
Issuance and modification of stock warrants   -    -    2,568,554    -    -      -    -    2,568,554 
                                           
Net loss   -    -    -    -    -      (10,530,002)   (154,049)   (10,684,051)
                                           
Balance, June 30, 2016   214,447,611   $21,445   $354,333,473   $1,275,838   $(1,983,024 )   $(358,319,891)  $(2,254,501)  $(6,926,660)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

  7 
   

 

IMMUNE THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Six Months Ended 
  

June 30, 2016

  

June 30, 2015

 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net loss  $(10,684,051)  $(5,496,051)
Adjustments to reconcile net loss to net cash flows used in operating activities:          
   Depreciation   981    1,335 
   Amortization   -    296,117 
   Stock issued, and amortization of stock issued, for prepaid services   1,539,928    3,530,894 
   Loss on settlement of debt   1,704,683    600,562 
   Stock issued for services   1,661,169    - 
   Stock issued for legal settlement   -    81,000 
   Amortization of debt discount   385,288    - 
   Stock warrant expense   2,568,554    - 
   Stock (returned) issued for donation        - 
   Stock issued for interest   149,000    - 
   Changes in operating assets and liabilities:          
     Accounts payable   104,131    (158,931)
     Accounts receivable   13,536    (7,718)
     Accrued liabilities   1,168,324    (112,285)
     Prepaid expenses and deposits   (11,272)   - 
           
Net cash used in operating activities   (1,399,729)   (1,265,077)
           
CASH FLOWS FROM INVESTING ACTIVITIES          
           
Net cash used in investing activities   -    - 
           
CASH FLOWS FROM FINANCING ACTIVITIES          
 Proceeds from sale of stock and exercise of warrants   50,000    152,000 
 Proceeds from issuance of notes payable   1,390,869    943,475 
           
 Net cash provided by financing activities   1,440,869    1,095,475 
Net increase (decrease) in cash   41,140    (169,602)
Cash and cash equivalents at beginning of period   23,149    191,987 
Cash and cash equivalents at end of period  $64,289   $22,385 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

  8 
   

 

IMMUNE THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Six Months Ended 
   June 30, 2016   June 30, 2015 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:          
           
Cash paid for interest  $10,317   $7,500 
           
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:          
           
Conversion of debt and accrued interest to common stock  $3,064,259   $600,562 
           
Non-controlling interest  $154,049   $262,956 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

  9 
   

 

Immune Therapeutics, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

June 30, 2016

(Unaudited)

 

1. Organization and Description of Business

 

Immune Therapeutics, Inc. (the “Company”) was initially incorporated in Florida on December 2, 1993 as Resort Clubs International, Inc. (“Resort Clubs”). It was formed to manage and market golf course properties in resort markets throughout the United States. Galliano International Ltd. (“Galliano”) was incorporated in Delaware on May 27, 1998 and began trading in November 1999 through the filing of a 15C-211. On November 10, 2004, Galliano merged with Resort Clubs. Resort Clubs was the surviving corporation. On August 23, 2010, Resort Clubs changed its name to pH Environmental Inc. (“pH Environmental”).

 

On April 23, 2012, pH Environmental completed a name change to TNI BioTech, Inc., and on April 24, 2012, we executed a share exchange agreement for the acquisition of all of the outstanding shares of TNI BioTech IP, Inc. On September 4, 2014, a majority of our shareholders approved an amendment to our Amended and Restated Articles of Incorporation, as amended, to change our name to Immune Therapeutics, Inc. We filed our name change amendment with the Secretary of State of Florida on October 27, 2014 changing our name to Immune Therapeutics, Inc.

 

The Company currently operates out of Orlando, Florida. In July 2012, the Company’s focus turned to acquiring patents that would protect and advance the development of new uses of opioid-related immune- therapies, such as low dose naltrexone (“LDN”) and Methionine [Met5]-enkephalin (“MENK”). Today, the Company is focused on the development and commercialization of therapeutic treatments for cancer, HIV/AIDS, malaria, and opportunistic infections arising from their treatment, and commercializing affordable, non-toxic therapies in Africa, to be followed by Asia and South America, and autoimmune diseases and immune disorders by combating these severe and fatal diseases through the stimulation and/or regulation of the body’s immune system. The Company’s therapies are believed to stimulate and/or regulate the immune system in such a way that they provide the potential to treat a variety of diseases. We believe our therapies may be able to correct abnormalities or deficiencies in the immune system in diseases such as HIV infection, autoimmune disease, immune disorders, or cancer; all of which can lead to disease progression and life-threatening situations when the immune system is not functioning optimally.

 

In October 2012, the Company formed TNI BioTech International, Ltd., a BVI company in Tortola, British Virgin Islands, which was set up to allow the Company to market and sell LDN in those countries outside the U.S. in which we have been able to obtain approval to sell the Company’s products.

 

In August 2013, the Company formed its United Kingdom subsidiary, TNI BioTech, LTD (the “UK Subsidiary”). The UK Subsidiary received approval to be considered a micro, small or medium-sized enterprise (“SME”) with the European Medicines Agency (“EMA”) on August 21, 2013. The designation provides the UK Subsidiary with significant discounts when holding meetings or submitting filings to the EMA. On September 19, 2013, the UK Subsidiary submitted a pre-submission package to the EMA regarding Crohn’s Disease. The EMA granted the UK Subsidiary a meeting that took place on September 27, 2013. The UK Subsidiary is eligible to benefit from the provisions for administrative and financial assistance for SMEs set out in Regulation (EC) No 2049/2005. The Company will apply to obtain EMA benefits once funding becomes available.

 

In December 2013, the Company formed a new subsidiary, Cytocom Inc. (“Cytocom”). Cytocom is a clinical-stage pharmaceutical company focused on the development of the first affordable non-toxic immunodulator for the treatment of inflammatory diseases, immune-related disorders, and cancer, and is responsible for the development of the Company’s patented therapies under the auspices of the FDA and EMA. In December 2014, the Company finalized the distribution of common stock of Cytocom to its shareholders. As part of the transaction, the Company retained exclusive rights to all international patents, in-country approvals, formulations, trademarks, manufacturing, marketing, sales, and distributions rights in emerging nations, including Africa, Central America, South America, Russia, India, China, Far East, and The Commonwealth of Independent States (former Soviet Union). The Company will continue to have access to existing clinical data as well as any new data generated by Cytocom during drug development. On December 8, 2014, the number of Cytocom shares of common stock that were issued to our shareholders totaled 113,242,522 shares. In connection with the transaction, Cytocom issued 140,100,000 shares of its common stock to the Company, which gave the Company a 55.3% equity interest in Cytocom on that date. In April 2016, the Board of Directors and a majority of shareholders of Cytocom approved a reverse stock split of Cytocom’s outstanding common stock with one new share of stock for each twenty old shares of common stock. Cytocom effectuated and finalized the reverse split in June 2016. At June 30, 2016, the Company’s equity interest had been further reduced to 41%, by subsequent issuances of Cytocom common stock to shareholders in settlement of notes payable.

 

  10 
   

 

In March 2014, the Company incorporated Airmed Biopharma Limited, an Irish corporation with an address in Dublin, Ireland, and Airmed Holdings Limited, an Irish company domiciled in Bermuda. The Irish companies were set up to benefit from incentives granted by the Irish government for the establishment of pharmaceutical companies (many of the world’s leading pharmaceutical companies have located in Ireland), and so that the Company could take advantage of Ireland’s status as a member of the European Union and the European Economic Area. An Irish limited liability company enjoys a low corporate income tax rate of 12.5%, one of the lowest in the world. The Irish-domiciled company hopes to qualify for tax incentives for Irish holding/headquartered companies and to benefit from the network of double tax treaties that reduce withholding taxes. TNI BioTech International, Ltd. will manage our international distribution, using product that is manufactured in Ireland and elsewhere.

 

Going Concern

 

The Company has incurred significant net losses since inception and has relied on its ability to fund its operations through private equity financings. Management expects operating losses and negative cash flows to continue at more significant levels in the future. As the Company continues to incur losses, transition to profitability is dependent upon the successful development, approval, and commercialization of its product candidate and the achievement of a level of revenues adequate to support the Company’s cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional cash. Management intends to fund future operations through additional private or public debt or equity offerings, and may seek additional capital through arrangements with strategic partners or from other sources. Based on the Company’s operating plan, existing working capital at December 31, 2015 was not sufficient to meet the cash requirements to fund planned operations through December 31, 2016 without additional sources of cash. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business.

 

The Company experienced a net loss from operations of $(7,626,348) and used cash and cash equivalents from operations in the amount of $1,399,729) during the six months ended June 30, 2016, resulting in stockholders equity of $(6,926,660) at June 30, 2016.

 

2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring adjustments, unless otherwise indicated) necessary to present fairly the financial position and results of operations for the periods presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2015 (including the notes thereto) set forth in Form 10-K/A.

 

The Company qualifies as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue for the year ended December 31, 2015. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.

 

  11 
   

 

Use of Estimates

 

The preparation of the Company’s financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from such estimates.

 

Cash, Cash Equivalents, and Short-Term Investments

 

The Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include bank demand deposits, marketable securities with maturities of three months or less at purchase, and money market funds that invest primarily in certificates of deposits, commercial paper and U.S. government and U.S. government agency obligations. Cash equivalents are reported at fair value.

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company is exposed to credit risk, subject to federal deposit insurance, in the event of a default by the financial institutions holding its cash and cash equivalents to the extent of amounts recorded on the balance sheets. The cash accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. At June 30, 2016, the Company has no uninsured cash balances.

 

Segment and Geographic Information

 

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment and does not segment the business for internal reporting or decision making.

 

Fair Value of Financial Instruments

 

In accordance with the reporting requirements of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 825, “Financial Instruments”, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this standard and includes this additional information in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments. Cash and cash equivalents, accounts receivable and accounts payable are accounted for at cost which approximates fair value due to the relatively short maturity of these instruments. The carrying value of notes payable also approximates fair value since they bear market rates of interest and other terms. None of these instruments are held for trading purposes.

 

Fair Value Measurements

 

The ASC Topic 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value in accordance with U.S. generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the customer’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time.

 

Property and Equipment

 

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is determined on a straight-line basis over the estimated useful lives of the assets, which generally range from three to five years. Maintenance and repairs are charged against expense as incurred. Depreciation expense for the quarters ended June 30, 2016 and June 30, 2015 was $434 and $667, respectively.

 

  12 
   

 

Intangible Assets

 

Costs incurred to acquire and/or develop the Company’s product licenses and patents are capitalized and amortized by straight-line methods over estimated useful lives of seven to sixteen years. Intangible assets are stated at the lower of cost or estimated fair market value. At the end of 2015, the Company determined that the unamortized carrying amount recorded for the acquisition of licenses and patents related to LDN were impaired, and recorded an impairment loss of $5,226,352. In 2014, the Company determined that the carrying amount recoded for the acquisition of licenses and patents related to MENK were impaired, and recorded an impairment loss of $9,908,477.

 

During the quarters ended June 30, 2016 and June 30, 2015, the Company did not capitalize any costs to acquire and/or develop the Company’s product licenses and patents. (See Note 10). Amortization expense for the quarters ended June 30, 2016 and June 30, 2015 was $0 and $148,059, respectively.

 

Impairment of Long-Lived Assets

 

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable as prescribed by ASC Topic 360-10-05, “Property, Plant and Equipment.” If the carrying amount of the asset, including any intangible assets associated with that asset, exceeds its estimated undiscounted net cash flow, before interest, the Company will recognize an impairment loss equal to the difference between its carrying amount and its estimated fair value. No impairment losses were recognized for the quarters ended June 30, 2016 and June 30, 2015.

 

Research and Development Costs

 

Research and development costs are charged to expense as incurred and are typically comprised of salaries and benefits, pre-clinical studies, clinical trial activities, drug development and manufacturing, fees paid to consultants and other entities that conduct certain research and development activities on the Company’s behalf and third-party service fees, including clinical research organizations and investigative sites. Costs for certain development activities, such as clinical trials are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided by vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as operating expenses.

 

Income Taxes

 

The Company follows FASB ASC Topic 740, “Income Taxes,” which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the asset will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

 

The standard addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC Topic 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. At the date of adoption, and as of December 31, 2015 and June 30, 2016, the Company does not have a liability for unrecognized tax uncertainties.

 

The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. At the end of the quarters ended June 30, 2016 and June 30, 2015, the Company had not accrued any interest or penalties related to uncertain tax positions.

 

  13 
   

 

Stock-Based Compensation and Issuance of Stock for Non-Cash Consideration

 

The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors, including employee stock options, based on estimated fair values equaling either the market value of the shares issued or the value of consideration received, whichever is more readily determinable. The majority of the non-cash consideration pertains to services rendered by consultants and others and has been valued at the fair market value of the Company’s common stock at the date of the agreement.

 

The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC Topic 505-50, “Equity-Based Payments to Non-Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete.

 

Non-controlling Interest

 

In accordance with ASC 810, Consolidation, the Company consolidates Cytocom, Inc. The non-controlling interests in Cytocom represent the interests of outside shareholders in the equity and results of operations of Cytocom.

 

Net Loss per Share

 

Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method and the if-converted method. Dilutive common stock equivalents are comprised of common stock purchase warrants and options outstanding. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

 

A calculation of basic and diluted net loss per share follows:

 

   For the three months ended
June 30,
   For the six months ended
June 30,
 
   2016   2015   2016   2015 
Net loss per share:                
Numerator                    
Net loss  $(4,038,648)  $(2,590,645)  $(10,684,051)  $(5,496,051)
Net loss attributed to Common stockholders  $(3,928,719)  $(2,451,754)  $(10,530,002)  $(5,233,095)
                     
Denominator                    
Weighted-average common shares outstanding—                    
Denominator for basic and diluted net loss per share   207,229,469    147,387,763    199,076,428    142,563,007 
Basic and diluted net loss per share attributed                    
 to common stockholders  $(0.02)  $(0.02)  $(0.05)  $(0.04)

 

The Company’s potential dilutive securities which include stock, stock warrants and convertible debt have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average Common stock outstanding used to calculate both basic and diluted net loss per share is the same.

 

  14 
   

 

The following shares of potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as the effect of including such securities would be antidilutive:

  

   As of June 30, 
   2016   2015 
Warrants to purchase Common stock   32,748,908    9,372,750 
    32,748,908    9,372,750 

 

Recent Accounting Standards

 

During the quarter ended June 30, 2016, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

 

The Company qualifies as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue and did not have such amount as of December 31, 2015, our last fiscal year. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.

 

3. Property and Equipment

 

   June 30, 2016   December 31, 2015 
Property and equipment:          
Computer equipment  $8,013   $8,013 
           
Less accumulated depreciation   (7,312)   (6,331)
           
Property and equipment, net  $701   $1,682 

 

The Company utilizes the straight-line method for depreciation, using three to five-year depreciable asset lives. Depreciation expense was not material for all periods presented.

 

4. Accrued Liabilities

 

Accrued expenses and other liabilities consist of the following:

 

  

June 30, 2016

   December 31, 2015 
   (in thousands) 
Accrued payroll to officers and others  $1,013   $758 
Accrued interest and penalties - notes payable   843    237 
Accrued legal settlements   174    282 
Other accrued liabilities   1    4 
Total accrued expenses and other liabilities  $2,031   $1,281 

 

  15 
   

 

5. Notes Payable

 

Notes payable consist of the following:

    June 30, 2016    December 31, 2015  
Promissory note issued July 29, 2014 to Ira Gaines. The note matures on January 27, 2015 and earns interest at a rate of 18% per annum. The Company was unable to repay the note at maturity and the note is in default, although no demand for repayment has been made by the lender.  $100,000   $100,000 
           
Promissory notes issued between November 26, 2014 and September 30, 2015, to raise up to $2,000,000 in debt. Lenders earn interest at a rate of 10% per annum, plus a pro-rata share of two percent of the Company’s gross receipts for sales of IRT-103-LDN in perpetuity. Notes will be repaid in 36 monthly installments of principal and interest commencing no later than October 15, 2015. Notes aggregating $346,000 were in default at June 30, 2015, as the Company was unable to pay installments on those notes on their due dates. No demands for repayment have been made by the lenders. One of these notes ($60,000), together with interest accrued on the note to March 31, 2016 ($8,183), was converted to equity on August 4, 2016 for 852,292 shares of the Company’s common stock. In addition, the note holder agreed to waive future payments of his pro-rata share of two percent of the Company’s gross receipts for sales of LodonalTM in perpetuity in return for 187,500 shares of the common stock of Cytocom.   346,000    711,500 
           
Promissory note issued October 17, 2014 to Roger Bozarth. The note matures on October 17, 2015 and earns interest at a rate of 2% per annum. The lender converted this note to common stock in January 2016.   -    7,000 
           
Promissory notes issued between May 1, 2015 and June 30, 2016, and maturing between June 14, 2015 and June 30, 2017. Lenders on loans aggregating $834,927 earn interest at rates between 10% and 18% per annum. On loans aggregating $198,500, interest is payable in a fixed amount not tied to a specific interest rate. One of these notes ($278,933), together with interest accrued to April 1, 2016 ($18,828), was converted on August 4, 2016 to 3,722,013 shares of the Company’s common stock. Notes aggregating $198,500 were in default at June 30, 2016, as the Company was unable to repay those notes on their due dates. No demands for repayment have been made by the lenders.   1,033,427    669,933 
           
Promissory note issued January 26, 2015 to Robert J. Dailey. The note is senior to, and has priority in right of payment over, all indebtedness of the Company. The note earns interest at a rate of 2% per annum and was due on July 30, 2015. The Company was unable to repay the note at maturity and the note is in default, although no demand for repayment has been made by the lender. This note, together with interest accrued to April 1, 2016 ($4,778), was converted on August 4, 2016 to 2,559,725 shares of the Company’s common stock.   200,000    200,000 
           
Promissory notes issued by Cytocom Inc. between April 29, 2015 and December 31, 2015. Lenders earn interest at rates between 5% and 10% per annum. These notes mature on September 30, 2016. One of these notes ($350,000), together with interest accrued on the note to March 31, 2016 ($11,304), was converted to equity on August 4, 2016 for 4,516,302 shares of the Company’s common stock.   775,000    800,000 
           
Promissory notes issued in December 2015. Lenders earn interest at a rate of 10% per month. Notes are repayable on March 9, 2016. The Company was unable to repay the note at maturity and the note is in default. The Company is obligated to pay late-payment penalties totaling $5,000 per day.   100,000    130,000 
           
Promissory note issued November 24, 2015 as settlement of amounts owing to a law firm. The Lender earns interest at the rate of 10% per annum. The note is repayable in full on December 1, 2016. This note, together with interest accrued on the note to July 19, 2016 ($10,536), was converted to equity on July 19, 2016 for 1,235,356 shares of the Company’s common stock.   175,268    175,268 
           
Promissory notes issued between April 6, 2016 and June 2, 2016 that mature between October 1, 2016 and January 31, 2017, and include stock conversion features, warrants and original issue debt discounts.   1,161,250    - 
           
Promissory notes issued to an officer of the Company effective November 3, 2015 and maturing November 3, 2016 for settlement of accrued payroll, bearing interest at 10% per annum and including a stock conversion feature. One of these notes ($50,000), together with interest accrued on the note to July 19, 2016 ($3,479), was converted to equity on July 19, 2016 for 1,069,589 shares of the Company’s common stock.   162,737    - 
           
Less: Original issue discounts on notes payable and warrants issued with notes.   (596,246)   - 
           
Total   3,457,436    2,793,701 
           
Less: Current Portion  $(3,457,436)  $(2,793,701)
           
Long-Term debt, less current portion  $-   $- 

 

  16 
   

 

As of June 30, 2016, the Company had accrued $843,275 in unpaid interest, compared to $236,671 as of December 31, 2015. These amounts included default of penalties of $581,324 at June 30, 2016, compared to $18,954 at December 31, 2015. During the six months ended June 30, 2016, 896,296 shares with a fair value of $149,000 were issued by the Company for interest expense under promissory notes.

 

6. Capital Structure—Common Stock and Common Stock Purchase Warrants

 

Each holder of common stock is entitled to vote on all matters and is entitled to one vote for each share held. No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock or any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.

 

As of June 30, 2016 and 2015, the Company was authorized to issue 500,000,000 common shares at a par value of $0.0001 per share.

 

As of June 30, 2016, the Company had 214,447,611 shares of common stock outstanding, and 174,850,047 outstanding as of December 31, 2015.

 

Stock Warrants

 

In the quarter ended June 30, 2016, the Company issued 23,654,908 warrants.

 

In the quarter ended June 30, 2016, the Company extended to December 31, 2018 the maturity dates on 5,006,666 existing warrants that were originally issued with expiration dates between July 25, 2016 to December 17, 2018. These warrants were originally issued with 3 to 5 year terms, with exercise prices ranging between $0.75 and $1.00.

 

There were no modifications of the terms of any warrants issued by the Company in the quarter ended June 30, 2015.

 

Following is a summary of outstanding stock warrants at June 30, 2016 and activity during the six months then ended:

 

   Number of Shares   Exercise Price   Weighted Average Price 
             
Warrants as of December 31, 2015   9,131,500     $ 0.07-15.00    $1.47 
                
Issued in 2016   23,654,908     $ 0.14-2.00    $0.32 
                
Expired   (37,500)  $5.00   $5.00 
                
Exercised   (0)  $0   $0 
                
Warrants as of June 30, 2016   32,748,908   $  0.07-15.00    $0.54 

 

Summary of outstanding warrants as of June 30, 2016:

 

Expiration Date   Number of
Shares
    Exercise
Price
    Remaining
Life (years)
 
                   
Third Quarter 2016     125,000     $ 5.00       .25  
Fourth Quarter 2017     350,000       1.50-9.00       1.50  
First Quarter 2018     127,500     $ 15.00       1.75  
Second Quarter 2018     33,334     $ 15.00       2.00  
Third Quarter 2018     250,000     $ 1.50       2.25  
Fourth Quarter 2018     6,089,166     $ 1.00-1.50       2.50  
First Quarter 2019     4,024,000     $ 0.50-2.00       2.75  
Second Quarter 2019     135,000     $ 0.07–0.23       3.00  
Third Quarter 2019     260,000     $ 0.50-1.50       3.25  
Fourth Quarter 2019     400,000     $ 0.14       3.50  
Second Quarter 2020     300,000     $ 0.50       4.00  
Third Quarter 2020     1,000,000     $ 0.20       4.25  
Fourth Quarter 2020     12,650,000     $ 0.20       4.50  
First Quarter 2021     7,004,908     $ 0.10-0.20       4.75  

 

  17 
   

 

7. Stock Compensation

 

Shares Issued for Services

 

During the six months ended June 30, 2016 and 2015, the Company issued 23,643,000 and 10,239,170 shares of common stock respectively for consulting fees. The Company valued these shares at $4,543,170 and $1,810,876 respectively, based upon the fair value of the common stock at the dates of the agreements. The consulting fees are amortized over the contract periods which are typically between 12 and 24 months. The amortization of prepaid services totaled $1,539,928 and $3,530,894 for the six months ended June 30, 2016 and 2015.

 

8. Income Taxes - Results of Operations

 

There was no income tax expense reflected in the results of operations for the quarters ended June 30, 2016 and 2015 because the Company incurred a net loss in both quarters.

 

The Company has recognized no tax benefit for the losses generated for the periods through December 31, 2015. ASC Topic 740 requires that a valuation allowance be provided if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company’s ability to realize the benefit of its deferred tax asset will depend on the generation of future taxable income. Because the Company has yet to recognize revenue, we believe that the full valuation allowance should be provided.

 

The Company’s effective tax rate for fiscal years 2015 and 2013 was 0%. The Company’s tax rate can be affected by recurring items, such as tax rates in foreign jurisdictions and the relative amount of income we earn in jurisdictions. It may also be affected by discrete items that may occur in any given year, but are not consistent from year to year.

 

As of December 31, 2015, the Company has estimated federal and state income tax net operating loss (“NOL”) carry-forwards of approximately $66,500,000, which will expire in 2032-2035.

 

9. Licenses and Supply Agreements

 

Patent and Subsidiary Acquisition

 

The Company has not entered into any new licenses or supply agreements during quarter ending June 30, 2016. All prior licenses, supply agreements, and patents remain unchanged from the prior quarter.

 

10. Commitments and Contingencies

 

Except as described below, the Company has not created any new commitments or contingency obligations during quarter ending June 30, 2016. All other prior commitments and contingent obligations remain unchanged from the prior quarter.

 

Distribution of LodonalTM in Nigeria

 

Through its wholly-owned subsidiary, TNI BioTech International, Ltd., in December 2015 the Company completed a 90-day bridging trial for the treatment of patients with HIV/AIDS. The trial consisted of a total of 150 patients of both genders between the ages of 18-60, each of whom was infected HIV/AIDS. The primary objective of this bridging trial was to confirm that LodonalTM has a beneficial effect on the immune system of immune deficient patients and that it is safe. The trial separated patients into a Control (placebo) Group and a Treatment Group (which was administered LodonalTM). The efficacy of increasing CD4 count [cell/mm3] between Day-1 and Day-90 by at least 25% was set as the criteria for demonstrating beneficial effect on the immune system. Safety was demonstrated through quality of life assessment and vitals both of which were not adversely affected. Treatment Group patients were given a daily dose of 4.5-mg/kg of Lodonal.

 

  18 
   

 

In April 2016, the Company announced that Nigeria’s National Agency for Food and Drug Administration and Control (“NAFDAC”) had approved its LodonalTM as an over the counter, non-toxic adjunct therapy in the treatment of HIV/AIDS and immune system regulator. NAFDAC is the Nigerian agency under the Federal Ministry of Health that is responsible for regulating and controlling the manufacture, import/export, distribution, sale and use of food and drugs. The NAFDAC approval clears the way for the Company and its distribution partners to complete the registration of LodonalTM for sale in Nigeria. The Company is now in the process of completing the registration to import the drug into Nigeria

 

Contract Manufacturing Agreements

 

On May 16, 2016, the Company entered into an agreement with Complete Pharmacy and Medical Solutions, LLC (“CPMS”) to compound, package and distribute the LDN tablets, capsules and/or creams in the United States. The initial term of the agreement is three years, with the option to renew for an additional year. The agreement may be terminated by (i) mutual agreement, (ii) in the event of a breach, provided however that if the Company terminates the contract to reimburse CPMS for all unused packaging materials for the LDN, which unused packaging materials CPMS will provide to IMUN. If CPMS does not receive and ship at least 1,000 orders (prescriptions), the Company will be required to reimburse CPMS for 100% of the “ramp up costs” (defined as all costs and expenses of labor and materials related to the testing, and required FDA and other governmental documentation/approvals of test data) of providing and producing the LDN, even where the Company cancels/terminates the Agreement, which provision shall survive the cancellation/termination of this Agreement.  

 

Operating Leases

 

At June 30, 2016, the Company was a party to an agreement to lease office space in Orlando, Florida. Rent expense for the quarters ended June 30, 2016 and 2015 was $4,011 and $18,319, respectively.

 

Legal Proceedings

 

None.

 

11. Subsequent Events

 

In July 2016, the Company amended the terms of a $100,000 note payable that was due of March 29, 2016. In accordance with the amendment, the amount of the note was increased to $130,000, the maturity date was extended to July 31, 2016, and the number of Company shares due on the original note was increased from 100,000 to 225,000. The note is in default.

Between July 1, 2016 and August 12, 2016, the Company repaid or amended the following notes payable through conversions of obligations into shares of the Company’s common stock as follows:

 

  A note payable to an officer ($50,000), together with interest accrued on the note to July 14, 2016 ($3,479), was converted to equity on July 19, 2016 for 1,069,589 shares of the Company’s common stock.
   
A note payable ($175,267), together with interest accrued on the note to June 30, 2016 ($10,536), was converted to equity on July 19, 2016 for 1,235,356 shares of the Company’s common stock.
   
A note payable by Cytocom ($350,000), together with interest accrued on the note to April 1, 2016 ($11,304), was converted to equity on August 4, 2016 for 4,516,302 shares of the Company’s common stock .
 
A note payable ($60,000), together with interest accrued on the note to April 1, 2016 ($8,183), was converted to equity on August 4, 2016 for 852,292 shares of the Company’s common stock. In addition, the note holder agreed to waive future payments of his pro-rata share of two percent of the Company’s gross receipts for sales of LodonalTM in perpetuity in return for 187,500 shares of the common stock of Cytocom.
   
Two notes payable ($200,000 and $278,933), together with interest accrued on the note to April 1, 2016 ($23,606), were converted to equity on August 4, 2016 for 6,281,738 shares of the Company’s common stock.

 

  19 
   

 

In July 2016, the Company issued promissory notes as follows:

 

  A note payable, dated July 5, 2016, for $50,000, paying interest at 6% per month, and maturing on October 5, 2016.
   
  A note payable, issued on July 7, 2016, for $180,000, maturing on March 07, 2017. The Company received $150,000 upon issuance of the note. The Company must apply the consideration towards obtaining governmental approvals for the use and sale of Lodonal™ in Malawi, Africa. If the Company fails to repay the note at maturity, the holder has the right, at any time after the maturity date, at its election, to convert all or part of the outstanding and unpaid principal and accrued into shares common stock of the Company, in number equal to the dollar conversion amount divided by the lesser of $0.15 or 80% of the lowest trade price in the 25 trading days prior to the conversion.

 

In July 2016, the Company issued shares of the Company’s common stock for services as follows:

 

  1,000,000 shares issued on July 14, 2016 as a bonus under an agreement to provide investor relations services.
   
  200,000 shares issued on July 19, 2016 for services related to the trial of LodonalTM in Nigeria.

 

Between July 1, 2016 and August 12, 2016, the Company issued warrants as follows:

 

  A warrant issued to Paul Akin, director, on July 1, 2016, for services as director, to purchase 1,000,000 shares of the Company’s common stock at $0.15 per share. The warrant expires on June 30, 2021.
   
  A warrant issued to Nicholas Plotnikoff, director, on August 5, 2016, as payment for services previously rendered as director, to purchase 150,000 shares of the Company’s common stock at $0.20 per share. The warrant expires on July 28, 2021.

 

As of August 12, 2016, the Company had outstanding 220,989,592 shares of common stock.

 

  20 
   

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

Forward-Looking Statements and Associated Risks

 

This section and other parts of this Form 10-Q contain forward-looking statements. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements also can be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in our Annual Report on Form 10-K/A for the year ended December 31, 2015 filed with the Securities and Exchange Commission on May 16, 2016 (the “2015 Form 10-K/A”) under the heading “Risk Factors”.

 

The following discussion should be read in conjunction with the 2015 Form 10-K/A and the consolidated financial statements and notes thereto included elsewhere in this Form 10-Q. All information presented herein is based on the Company’s fiscal calendar. Unless otherwise stated, references in this report to particular years, quarters, months or periods refer to the Company’s fiscal years ended in December and the associated quarters, months, or periods of those fiscal years. Each of the terms the “Company”, “we”, “us” or “our” as used herein refers collectively to Immune Therapeutics, Inc. and its subsidiaries, unless otherwise stated. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

 

General

 

Immune Therapeutics, Inc. (the “Company”) was initially incorporated in Florida on December 2, 1993 as Resort Clubs International, Inc. (“Resort Clubs”). It was formed to manage and market golf course properties in resort markets throughout the United States. Galliano International Ltd. (“Galliano”) was incorporated in Delaware on May 27, 1998 and began trading in November 1999 through the filing of a 15C-211. On November 10, 2004, Galliano merged with Resort Clubs. Resort Clubs was the surviving corporation. On August 23, 2010, Resort Clubs changed its name to pH Environmental Inc. (“pH Environmental”).

 

On April 23, 2012, pH Environmental completed a name change to TNI BioTech, Inc., and on April 24, 2012, we executed a share exchange agreement for the acquisition of all of the outstanding shares of TNI BioTech IP, Inc. On September 4, 2014, a majority of our shareholders approved an amendment to our Amended and Restated Articles of Incorporation, as amended, to change our name to Immune Therapeutics, Inc. We filed our name change amendment with the Secretary of State of Florida on October 27, 2014 changing our name to Immune Therapeutics, Inc.

 

The Company currently operates out of Orlando, Florida. In July 2012, the Company’s focus turned to acquiring patents that would protect and advance the development of new uses of opioid-related immune- therapies, such as low dose naltrexone (“LDN”) and Methionine [Met5]-enkephalin (“MENK”). The Company’s therapies are believed to stimulate and/or regulate the immune system in such a way that they provide the potential to treat a variety of diseases. We believe our therapies may be able to correct abnormalities or deficiencies in the immune system in diseases such as HIV infection, autoimmune disease, immune disorders, or cancer; all of which can lead to disease progression and life-threatening situations when the immune system is not functioning optimally.

 

In October 2012, the Company formed TNI BioTech International, Ltd., a BVI company in Tortola, British Virgin Islands, which was set up to allow the Company to market and sell LDN in those countries outside the U.S. in which we have been able to obtain approval to sell the Company’s products.

 

In August 2013, the Company formed its United Kingdom subsidiary, TNI BioTech, LTD (the “UK Subsidiary”). The UK Subsidiary received approval to be considered a micro, small or medium-sized enterprise (“SME”) with the European Medicines Agency (“EMA”) on August 21, 2013. The designation provides the UK Subsidiary with significant discounts when holding meetings or submitting filings to the EMA. On September 19, 2013, the UK Subsidiary submitted a pre-submission package to the EMA regarding Crohn’s Disease. The EMA granted the UK Subsidiary a meeting that took place on September 27, 2013. The UK Subsidiary is eligible to benefit from the provisions for administrative and financial assistance for SMEs set out in Regulation (EC) No 2049/2005.

 

  21 
   

 

In December 2013, the Company formed a new subsidiary, Cytocom Inc. (“Cytocom”), to focus on conducting LDN and MENK clinical trials in the United States. In December 2014, the Company finalized the distribution of common stock of Cytocom Inc. to its shareholders. As part of the transaction, the Company retained exclusive rights to all international patents, in-country approvals, formulations, trademarks, manufacturing, marketing, sales, and distributions rights in emerging nations, including Africa, Central America, South America, Russia, India, China, Far East, and The Commonwealth of Independent States (former Soviet Union). The Company will continue to have access to existing clinical data as well as any new data generated by Cytocom during drug development. On December 8, 2014, the number of Cytocom shares of common stock that were issued to our shareholders totaled 113,242,522 shares. In connection with the transaction, Cytocom issued 140,100,000 shares of its common stock to the Company, which has allowed the Company to retain a 55.3% stake in Cytocom until such time as funding for Cytocom closes. In April 2016, the Board of Directors and a majority of shareholders of Cytocom approved a reverse stock split of Cytocom Inc.’s outstanding common stock with one new share of stock for each twenty old shares of common stock. Cytocom effectuated and finalized the reverse split in June 2016. At June 30, 2016, the Company’s equity interest had been further reduced to 41%, by subsequent issuances of Cytocom common stock to shareholders in settlement of notes payable.

 

In March 2014, the Company incorporated Airmed Biopharma Limited, an Irish corporation with an address in Dublin, Ireland, and Airmed Holdings Limited, an Irish company domiciled in Bermuda. The Irish companies were set up to benefit from incentives granted by the Irish government for the establishment of pharmaceutical companies (many of the world’s leading pharmaceutical companies have located in Ireland), and so that the Company could take advantage of Ireland’s status as a member of the European Union and the European Economic Area. An Irish limited liability company enjoys a low corporate income tax rate of 12.5%, one of the lowest in the world. The Irish-domiciled company hopes to qualify for tax incentives for Irish holding/headquartered companies and to benefit from the network of double tax treaties that reduce withholding taxes. TNI BioTech International, Ltd. will manage our international distribution, using product that is manufactured in Ireland and elsewhere.

 

We are focused on the development and commercialization of therapeutic treatments for cancer, HIV/AIDS and autoimmune diseases and immune disorders by combating these severe and fatal diseases through the stimulation and/or regulation of the body’s immune system. Our growth strategy includes the near-term commercialization of our existing immunotherapies targeting cancer, Crohn’s disease and/or HIV/AIDS.

 

Research and Development

 

The Company’s research and development (“R&D”) activities commenced in the third quarter of 2012, the Company having only completed the initial acquisition of MENK-related patents required for research in the second quarter of that year. Through 2013 and the first nine months of 2014, we continued to build R&D organization and capabilities focusing primarily on new uses for opioid-related immuno-therapies, such as LDN and MENK. Those activities were suspended at the end of September 2014, due to lack of funding. They will resume only when we are able to raise sufficient new funding to cover planned studies.

 

Our R&D priorities include development of IRT-101 or MENK, a small synthetic peptide that is naturally occurring in the body, and IRT-103 LDN, an opioid receptor antagonist. Our pipeline provides two therapies with a wide range of indications that can be pursued. We believe that both molecules have the ability to stimulate the immune system in order to treat a variety of autoimmune diseases including multiple sclerosis, immune disorders such as Crohn’s disease, cancer, and viral infections such as HIV/AIDS.

 

Our R&D is overseen and managed internally, working with individuals, universities, and contract research organizations in order to utilize patents that we have licensed or acquired since our inception. We continue to seek to expand our pipeline of patents by reviewing other compounds, technologies or capabilities. We also seek out promising compounds and innovative technologies developed by third parties to incorporate into our discovery and development processes or projects.

 

  22 
   

 

Three Months Ended June 30, 2016 Compared to Three Months Ended June 30, 2015 (all dollar amounts and numbers in $000s, except percentages or where otherwise indicated)

 

Revenues

 

We had revenues from operations of $0 for the three months ended June 30, 2016, compared to revenues of $5,648 for three months ended June 30, 2015.

 

Operating Expenses

 

Selling, general and administrative

 

Selling, general and administrative expenses and related percentages for the three months ended June 30, 2016 and 2015 were as follows (dollar amounts in thousands):

 

  

For the three months

ended June 30,

 
   2016   2015 
Selling, general and administrative  $894   $444 
Increase/(decrease) from prior year  $450   $(1,397)
Percent increase/(decrease) from prior year   101%   (76%)

 

For the three months ended June 30, 2016 and 2015, selling, general and administrative expenses were made up as follows (dollar amounts in thousands):

 

  

For the three months

ended June 30,

 
   2016   2015 
Consulting and contractors  $160   $334 
Payroll   372    (43)
Professional fees   50    31 
Travel   26    17 
Other expenses   286    105 

 

In the three months ended June 30, 2016, total cash and cash accruals for selling, general and administrative expense was $827 compared to $444 for the corresponding period in 2015, an increase of $383 or 86%. Significant cash items included:

 

  consulting and contactor services obtained to assist the Company in raising capital, manage investor relations, and develop business in new markets, in the amount of $160 in 2016, a decrease of $174 or 52 % over the $334 spent in 2015. The decrease was the result primarily of the conversion of amounts owed from prior periods to equity, which resulted in a large credit to this expense category;
   
professional fees for legal, tax and accounting services in the amount of $50 in 2016, an increase of $19 or 61% over the $31 spent in 2015. The increase was the result of billing for audit and tax services in 2016 ($12) and higher legal fees related to debt settlements ($7);
 
payroll in the amount of $372 in 2016, an increase of $415or 965% over the $(43) reported in 2015. The increase reflects the fact that, in 2015, there was a $282 conversion of deferred payroll owed to a Company officer into an agreement to pay the officer a royalty on future product sales; and
   
travel in the amount of $26 in 2016, an increase of $9 or 49% over the $17 spent in 2015. 2016 travel was related mostly to investor relations.

 

  23 
   

 

Research and development

 

R&D expenses and related percentages for the three months ended June 30, 2016 and 2015 were as follows (dollar amounts in thousands):

 

  

For the three months

ended June 30,

 
   2016   2015 
Research and development  $67   $414 
Increase decrease from prior year  $(347)  $145 
Percent decrease from prior year   (84%)   (26%)

 

Expenses for research and development in the three months ended June 30, 2016 decreased by 84% compared to expenses in the same period in 2015. The decrease occurred mainly as a result a reduction in the cost trials in Nigeria, and legal fees paid to maintain patents and licenses.

 

In the three months ended June 30, 2016, total cash spent on R&D was $67, a decrease of $347 or 84% over the $414 spent in the same period in 2015. Significant cash items in 2016 included:

 

  payments for contracted technical services, $7 in2016, a decrease of $46 or 87 % over the $53 spent in 2015, reflecting the decreased use of contractors to perform research activities;
   
payments for professional fees $6 in 2016, a decrease of $4 or 40% over the $10 spent in 2015;
 
patent expenses of $45 in 2016, an increase of $42 or 1,400% over the $3 spent in 2015, reflecting payments for certain rights to use LDN.

 

All of the R&D spending in 2016 was on LDN. In 2015, 75% of R&D spending was on the development of LDN; the balance was spent on MENK.

 

Stock issued for services

 

The Company periodically issues stock to consultants who provide services to the Company under consulting contracts. The Company accrues a liability for these services calculated by the number of shares issued for the services multiplied by the price of the Company’s stock on the effective date of the consulting contract. The accrued liability is amortized over the period in which the services are provided to the Company. The Company reports these costs separately from Selling, general and administrative costs, and Research and development costs, to better demonstrate the true costs of Selling, general and administrative activities, and Research and development.

 

Amortization of accrued liabilities for stock issued for services G&A and related percentages for the three months ended June 30, 2016 and 2015 were as follows (dollar amounts in thousands):

 

  

For the three months

ended June 30,

 
   2016   2015 
Stock for services and Prepaid consulting services expense G&A  $1,195   $1,450 
Percentage decrease from prior year   (18%)   (37%)

 

The decline in expense reflects the decrease in the price of the Company’s stock year over year and the fact that the cost of shares issued for services prior to 2015 had been fully amortized prior to the third quarter of 2014.

 

The number of shares issued for prepaid consulting services G&A in the three months ending June 30, 2016 was 4,600,000 (966,668 in the corresponding period in 2015).

 

Prepaid consulting services G&A in the three months ended June 30, 2016 consisted of the following:
 
Amortization of cost of stock issued prior to 2016  $155 
Amortization of cost of stock issued in the first quarter of 2016   715 
Amortization of cost incurred for new stock issued second quarter of 2016 under consulting contracts entered into in 2016   325 

 

  24 
   

 

Amortization of stock issued for services R&D and related percentages for the three months ended June 30, 2016 and 2015 were as follows (dollar amounts in thousands):

 

  

For the three months

ended June 30,

 
   2016   2015 
Prepaid consulting services R&D  $0   $0 
Percentage increase/(decrease) from prior year   0%   (100)%

 

The cost of shares issued for R&D services have been fully amortized prior to the third quarter of 2014.

 

There were no new shares issued for prepaid consulting services R&D in the three months ending June 30, 2016 or 2015.

 

Warrant valuation expense

 

When the Company sells its stock to stockholders for cash, it periodically issues warrants to those stockholders to acquire additional stock at prices agreed at the date of the original sale. The Company incurs a cost for the rights attached to the warrants, which is calculated using the Black-Scholes Model (see above 4. Capital Structure—Common Stock and Common Stock Purchase Warrants.) This expense is reported in the Condensed Consolidated Statements of Operations above as the Warrant valuation expense.

 

In the three months ended June 30, 2016, the Company issued 8,054,908 warrants. In the three months ended June 30, 2015, the Company issued no warrants to stockholders.

 

Depreciation and amortization

 

The Company amortizes the costs incurred to acquire patents and licenses over the period of the related agreements. The decrease year over year in depreciation and amortization expense reflects the fact that, at the end of 2015, the Company determined that the unamortized carrying amount recorded for the acquisition of licenses and patents related to LDN were impaired, and recorded an impairment loss of $5,226,352. In 2014, the Company determined that the carrying amount recoded for the acquisition of licenses and patents related to MENK were impaired, and recorded an impairment loss of $9,908,477.

 

Depreciation and amortization expenses for the three months ended June 30, 2016 and 2015 were as follows (dollar amounts in thousands):

 

  

For the three months

ended June 30,

 
   2016   2015 
Depreciation expense  $0   $1 
Amortization expense  $0   $148 
Decrease from prior year  $(149)  $(570)
Percentage decrease from prior year   (100%)   (79)%

 

The decrease reflects the fact that all patents were fully amortized by the end of 2015.

 

  25 
   

 

Interest Expense

 

Interest expense for the three months ended June 30, 2016 and 2015 were as follows (dollar amounts in thousands):

 

  

For the three months

ended June 30,

 
   2016   2015 
Interest expense  $1,052   $51 
Increase/(decrease) from prior year  $1,001   $(70)
Percentage increase/(decrease) from prior year   1,963%   (58%)

 

The increase reflects the higher levels of interest-bearing debt in the second quarter of 2016. Interest expense for the quarter ended June 30, 2016 included $430 of penalties for late interest and principal payments ($0 for the quarter ended June 30, 2015).

 

Loss on settlement of debt (dollar amounts in thousands)

 

In three months ended June 30, 2016, certain lenders to the Company settled all or a portion of their notes or accounts payable by converting them to equity. The Company recorded an expense of $340, reflecting the fair value of the shares of common stock issued in exchange for the debt. In three months ended June 30, 2015, the Company recorded an expense of $88 to settle all or a portion of notes or accounts payable.

 

Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015 (all dollar amounts and numbers in $000s, except percentages or where otherwise indicated)

 

Revenues

 

We had revenues from operations of $3,463 for the six months ended June 30, 2016, compared to $7,718 for the six months ended June 30, 2015.

 

Operating Expenses

 

Selling, general and administrative

 

Selling, general and administrative expenses and related percentages for the six months ended June 30, 2016 and 2015 were as follows (dollar amounts in thousands):

 

  

For the six months

ended June 30,

 
   2016   2015 
Selling, general and administrative  $1,833   $846 
Increase/(decrease) from prior year  $987   $(1,511)
Percent increase/(decrease) from prior year   117%   (64%)

 

For the six months ended June 30, 2016 and 2015, selling, general and administrative expenses were made up as follows (dollar amounts in thousands):

 

  

For the six months

ended June 30,

 
   2016   2015 
         
Stock listing and investor relations expenses  $155   $38 
Consulting and contractors   484    356 
Payroll   767    179 
Professional fees   136    104 
Travel   45    121 
Insurance   -    (126)
Other expenses   246    174 

 

  26 
   

 

In the six months ended June 30, 2016, total cash and cash accruals for selling, general and administrative expense was $1,833 compared to $846 for the corresponding period in 2015, an increase of $987 or 117%. Significant cash items included:

 

  consulting and contractor services obtained to assist the Company in raising capital, manage investor relations, and develop business in new markets, in the amount of $484 in 2016, an increase of $ 128 or 36 % over the $356 spent in 2015. The increase was the result of the conversion to equity of amounts owed to contractors from prior periods, and fees paid to advisors who are assisting the Company with manufacturing and marketing activities in the United States and Africa;
   
professional fees for legal, tax and accounting services in the amount of $136 in 2016, an increase of $32 or 31% over the $104 spent in 2015. The increase reflects the higher spending on audit and tax fees and legal fees related to debt negotiations;
   
payroll in the amount of $767 in 2016, an increase of $588 or 328% over the $179 spent in 2015. The increase is attributable to a $153 accrual for future payment of payroll taxes, an increase in headcount, contractually-mandated payroll increases for officers, and the conversion in 2015 of $282 of deferred payroll owed to a Company officer into an agreement to pay the officer a royalty on future product sales; and
   
travel in the amount of $45 in 2016, a decrease of $76 or 63% over the $121 spent in 2015, reflecting lower travel to Africa in 2016.

 

Research and development

 

R&D expenses and related percentages for the six months ended June 30, 2016 and 2015 were as follows (dollar amounts in thousands):

 

  

For the six months

ended June 30,

 
   2016   2015 
Research and development  $48   $592 
Increase decrease from prior year  $(544)  $(479)
Percent decrease from prior year   (92%)   (45%)

 

Expenses for research and development in the six months ended June 30, 2016 decreased by 92% compared to expenses in the same period in 2015. The decrease occurred mainly as a result a reduction in expenses recorded to settle payables related to amounts owing for R&D contracted technical services in 2016, and the fact that in 2015 a charge totaling $339 had been recorded for Nigeria trial expenses settled with Company stock.

 

In the six months ended June 30, 2016, total spending on R&D was $48, a decrease of $544 or 92% over the $592 spent in the same period in 2015. Significant cash items included:

 

expenses for contracted technical services, $(48) in 2016, a decrease of $187 or 135% over the $139 spent in 2015, reflecting the settlement of payables related to amounts owing for R&D contracted technical services;
   
payments for contracted services of $37 in 2016, an increase of $37 or 100% over the $0 spent in 2015, related to meetings with the FDA for resumption of trials by Cytocom;
   
expenses recorded for future license payments totaling $101, an increase of $26 or 35% over the $75 recorded in 2015, reflecting timing of accruals under license agreements.
   
rent expense of $(84) in 2016, a decrease of 99 or 660% over the $15 spent in 2015, reflecting (i) the closure of all R&D offices and (ii) the settlement of a rent dispute with a landlord in Maryland;
   
payments for professional fees of $27 in 2016, an increase of $11 or 67% over the $16 spent in 2015, reflecting the higher fees incurred to protect patent and intellectual property rights worldwide in 2016;
   
payroll of $(5)in 2016, a decrease of $10 or 200% over the $5 spent in 2015, reflecting the settlement in 2016 of claims for payroll taxes;
   
Spending on travel of $10 in 2016, an increase of $10 or 100% over the $0 spent in 2015, to oversee trials in Africa in 2016; and
   
Spending on trials of $10 in 2016, a decrease of $329 or 97% over the $339 spent in 2015, reflecting the fact that the Nigerian trial activity had mostly concluded in 2015.

 

  27 
   

 

All of the R&D spending in 2016 was for the development of LDN, compared to 75% of spending on LDN in 2015.

 

Stock issued for services

 

The Company periodically issues stock to consultants who provide services to the Company under consulting contracts. The Company accrues a liability for these services calculated by the number of shares issued for the services multiplied by the price of the Company’s stock on the effective date of the consulting contract. The accrued liability is amortized over the period in which the services are provided to the Company. The Company reports these costs separately from Selling, general and administrative costs, and Research and development costs, to better demonstrate the true costs of Selling, general and administrative activities, and Research and development.

 

Amortization of accrued liabilities for stock issued for services G&A and related percentages for the six months ended June 30, 2016 and 2015 were as follows (dollar amounts in thousands):

 

  

For the six months

ended June 30,

 
   2016   2015 
Stock for services and Prepaid consulting services expense G&A  $3,179   $3,612 
Percentage decrease from prior year   (12%)   (70%)

 

The decline in expense reflects the decrease in the price of the Company’s stock year over year.

 

The number of shares issued for prepaid consulting services G&A in the six months ending June 30, 2016 was 23,643,000 (10,239,170 in the corresponding period in 2015).

 

Prepaid consulting services G&A in the six months ended June 30, 2016 consisted of the following:
 
Amortization of cost of stock issued prior to 2016  $539 
      
Amortization of cost incurred for new stock issued in the six months ended June 30, 2016 under consulting contracts entered into in 2016   2,640 

 

 

Amortization of stock issued for services R&D and related percentages for the six months ended June 30, 2016 and 2015 were as follows (dollar amounts in thousands):

 

  

For the six months

ended June 30,

 
   2016   2015 
Prepaid consulting services R&D  $0   $0 
Percentage increase/(decrease) from prior year   0%   (100%)

 

The cost of all shares issued for services had been fully amortized prior to the third quarter of 2014.

 

There were no new shares issued for prepaid consulting services R&D in the six months ending June 30, 2016 or 2015.

 

Warrant valuation expense (dollar amounts in thousands)

 

When the Company sells its stock to stockholders for cash, it periodically issues warrants to those stockholders to acquire additional stock at prices agreed at the date of the original sale. The Company incurs a cost for the rights attached to the warrants, which is calculated using the Black-Scholes Model (see above 4. Capital Structure—Common Stock and Common Stock Purchase Warrants.) This expense is reported in the Condensed Consolidated Statements of Operations above as the Warrant valuation expense.

 

  28 
   

 

In the six months ended June 30, 2016, the Company issued 23,654,908 warrants to stockholders. In the six months ended June 30, 2015, the Company issued no warrants to stockholders.

 

  

For the six months

ended June 30,

 
   2016   2015 
Warrant valuation expense  $2,569   $0 
Percentage increase/(decrease) from prior year   100%   0%

 

Depreciation and amortization

 

The Company amortizes the costs incurred to acquire patents and licenses over the period of the related agreements.

 

Depreciation and amortization expenses for the six months ended June 30, 2016 and 2015 were as follows (dollar amounts in thousands):

 

  

For the six months

ended June 30,

 
   2016   2015 
Depreciation expense  $1   $1 
Amortization expense  $0   $296 
Increase/ (decrease) from prior year  $(296)  $(1,142)
Percentage increase/(decrease) from prior year   (100%)   (79%)

 

The decrease year over year in depreciation and amortization expense reflects the fact that all of the Company’s patents and licenses had been fully amortized by December 31, 2015. At the end of 2015, the Company determined that the unamortized carrying amount recorded for the acquisition of licenses and patents related to LDN were impaired, and recorded an impairment loss of $5,226,352. In 2014, the Company determined that the carrying amount recoded for the acquisition of licenses and patents related to MENK were impaired, and recorded an impairment loss of $9,908,477.

 

Interest Expense

 

Interest expense for the six months ended June 30, 2016 and 2015 was as follows (dollar amounts in thousands):

 

   

For the six months

ended June 30,

    2016   2015  
Interest expense   $ 1,353     $ 69  
Increase from prior year   $ 1,284     $ (213 )
Percentage decrease from prior year     1,861 %     (76 %)

 

The increase reflects the increased levels of interest-bearing debt in the first half of 2016. Interest expense for the six months ended June 30, 2016 included $562 of penalties for late interest and principal payments ($0 for the six months ended June 30, 2015).

  

Loss on settlement of debt (dollar amounts in thousands)

 

In six months ended June 30, 2016, certain lenders to the Company settled all or a portion of their notes or accounts payable by converting them to equity. The Company recorded an expense of $1,705, reflecting the fair value of the shares of common stock issued in exchange for the debt. In six months ended June 30, 2015, the Company recorded an expense of $88 to settle all or a portion of notes or accounts payable.

 

  29 
   

 

Liquidity

 

Liquidity is measured by the Company’s ability to secure enough cash to meet its contractual and operating needs as they arise. The Company had cash of $64,289 at June 30, 2016, compared to $23,149 at December 31, 2015. For the six months ended June 30, 2016 and 2015, net cash used in operating activities was $1,399,729 and $1,265,077, respectively. $0 cash was used in investing activities for the six months ended June 30, 2016 ($0 was used in 2015).

 

In May 2016, the Company announced that it had received approval for sale of LodonalTM in Nigeria. The Company expects to commence sales to Nigeria by the end of 2016. The Company believes that those sales will generate sufficient cash flows for the next 12 months to pay for operating expenses and to pay off current and past-due obligations. Until such sales commence, the Company expects to fund operations through sales of equity and notes payable, and conversions of exiting obligations into equity. The Company believes it will require between $300,000 and $350,000 monthly to meet its ongoing expenses and obligations.

 

If the Company is unable to generate sufficient cash flows from sales, or if it does not raise additional working capital to meet all of its operating obligations and expenditures, the Company may have to modify its business plan.

 

In addition to the cost of its ongoing operations, the Company expects it will incur future research and development expenditures in the next 12 months through Cytocom. Cytocom plans to conduct Phase II and Phase IIB trials for the treatment of Crohn’s disease, at an estimated cost of $3,900,000 and $7,500,000 respectively for each phase. If the trials do not commence before 2017, the Company will be required to make a payment of $100,000 in December 2016 under its license agreements. In prior years, the Company has been able to raise funds through sales of notes payable, and it expects to do the same for the payment due in 2016.

 

During the six months ended June 30, 2016 proceeds from the sale of stock and exercise of stock warrants totaled $50,000, compared to $152,000 for the corresponding period in 2015. We also received $1,390,868 from the issuance of notes payable in six months ended June 30, 2016, compared to $943,475 in 2015. There were $0 loan repayments made in cash in the six months ended June 30, 2016 ($0 in 2015).

 

Our ability to continue as a going concern is dependent entirely on raising funds through the sale of equity or debt. We anticipate that we will continue our attempt to raise capital through private equity and debt transactions, develop a credit facility with a lender, or the exercise of options and warrants; however, such additional capital may not be available to us at acceptable terms or available at all. In the event that we are unable to obtain additional capital, we would be forced to cease operations altogether.

 

Off-Balance Sheet Arrangements

 

During the three months ended June 30, 2016 and 2015, we did not engage in any off balance sheet arrangements as defined in item 303(a)(4) of the SEC’s Regulation S-K.

 

  30 
   

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not Applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Changes in Internal Controls over Financial Reporting

 

There were no changes in our internal controls over financial reporting that occurred during the period covered by this report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of our disclosure controls and procedures as defined in Rules 13(a)-15(e) under the Exchange Act. Based on this evaluation, the principal executive officer and principal financial officer concluded that, because of the weakness in internal controls over financial reporting described below, our disclosure controls and procedures are ineffective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

 

Management assessed the effectiveness of the internal controls over financial reporting as of June 30, 2016, using the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon this assessment, our management concluded that, as of June 30, 2016, the internal controls over financial reporting were not effective. The reportable conditions and material weakness relate to a limited segregation of duties and lack of an audit committee. The limited segregation of duties within our company and the lack of an audit committee are due to the small number of employees. Management has determined that this control deficiency constitutes a material weakness. This material weakness could result in material misstatements of significant accounts and disclosures that would result in a material misstatement to our interim or annual financial statements that would not be prevented or detected. In addition, due to limited staffing, we are not always able to detect minor errors or omissions in reporting.

 

Going forward, management anticipates that additional staff will be necessary to mitigate these weaknesses, as well as to implement other planned improvements. Additional staff will enable us to document and apply transactional and periodic controls procedures, permit a better review and approval process and improve quality of financial reporting. However, the potential addition of new staff is contingent on obtaining additional financing, and there is no assurance that we will be able to do so.

 

Limitations on the Effectiveness of Internal Controls

 

Readers are cautioned that our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our control have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any control design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

 

  31 
   


 

PART II OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

Note 10 of the “Notes to the Condensed Consolidated Financial Statements” are incorporated in this “Item 1: Legal Proceedings” by reference.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

In the quarter ended June 30, 2016, the Company issued a total of 9,320,081 shares of common stock (net of stock cancellations), compared to 14,706,410 in the corresponding period in 2015. 3,511,285 of those shares were issued to settle amounts owed under notes payable, including accrued and unpaid interest as applicable, to common stock as repayment of the notes (2,803,240 in 2015). 4,450,000 of the shares were issued to as payment for prepaid services to Company’s vendors (10,239,170 in 2015). Between April 1, 2016 and June 30, 2016, warrant holders exercised no warrants to purchase shares (0 in 2015). The Company sold an aggregate 312,500 shares of its common stock at an average of $0.08 per share. In total, the Company received $0.00 as consideration for the exercise of the previously-issued warrants and $25,000 for the purchase of common stock, for an aggregate sum of $25,000.

 

The following table lists all securities issued during in the three months ended June 30, 2016 without registering the securities under the Securities Act of 1933, as amended (the “Securities Act”):

 

Date  Description  Number  Purchaser  Proceeds  Consideration  Exemption 
4/7/2016  Common Stock Purchase   250,000   Director  $Nil  Board services   Sec. 4(a)(2) 
4/8/2016  Common Stock Purchase   680,035   Lender  $Nil  Debt settlement   Sec. 4(a)(2) 
5/4/2016  Common Stock Purchase   40,000   Consultant  $Nil  Advisory services   Sec. 4(a)(2) 
5/4/2016  Common Stock Purchase   40,000   Consultant  $Nil  Advisory services   Sec. 4(a)(2) 
5/4/2016  Common Stock Purchase   40,000   Consultant  $Nil  Advisory services   Sec. 4(a)(2) 
5/4/2016  Common Stock Purchase   40,000   Consultant  $Nil  Advisory services   Sec. 4(a)(2) 
5/4/2016  Common Stock Purchase   40,000   Consultant  $Nil  Advisory services   Sec. 4(a)(2) 
6/7/2016  Common Stock Purchase   296,296   Lender  $Nil  Origination Fees   Sec. 4(a)(2) 
6/23/2016  Common Stock Purchase   1,000,000   Officer  $Nil  Employment services   Sec. 4(a)(2) 
6/23/2016  Common Stock Purchase   437,500   Officer  $Nil  Employment services   Sec. 4(a)(2) 
6/29/2016  Common Stock Purchase   100,000   Lender  $Nil  Debt settlement   Sec. 4(a)(2) 
6/30/2016  Common Stock Purchase   2,000,000   Consultant  $Nil  Consulting   Sec. 4(a)(2) 
6/30/2016  Common Stock Purchase   1,000,000   Consultant  $Nil  Advisory services   Sec. 4(a)(2) 
6/30/2016  Common Stock Purchase   312,500   Shareholder  $25,000  Share purchase agreement   Sec. 4(a)(2) 
4/20/2016  Common Stock Purchase   500,000   Lender  $Nil  Origination fees/   Sec. 4(a)(2) 
5/10/2016  Common Stock Purchase   156,250   Consultant  $Nil  Settlement of accounts payable   Sec. 4(a)(2) 
6/1/2016  Common Stock Purchase   987,500   Lender  $Nil  Debt settlement   Sec. 4(a)(2) 
6/16/2016  Common Stock Purchase   50,000   Consultant  $Nil  Advisory services   Sec. 4(a)(2) 
6/16/2016  Common Stock Purchase   50,000   Consultant  $Nil  Advisory services   Sec. 4(a)(2) 
6/16/2016  Common Stock Purchase   50,000   Consultant  $Nil  Advisory services   Sec. 4(a)(2) 
6/21/2016  Common Stock Purchase   625,000   Ex-officer  $Nil  Board and employment services   Sec. 4(a)(2) 
6/21/2016  Common Stock Purchase   625,000   Ex-officer  $Nil  Board and consulting services   Sec. 4(a)(2) 

 

The issuances of the Company’s securities in connection with the above issuances were completed in private transactions by the Company not involving any public offering pursuant to Section 4(a)(2) and Rule 506 of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). The shares were issued bearing a restrictive legend and may not be resold by the holders unless such securities are registered or an exemption from registration is available. The Company determined, based on representations of the investors, that the investors were “accredited investors” as defined under Rule 501(a) of the Securities Act.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

The issuances of the Company’s securities were completed in private transactions by the Company not involving any public offering pursuant to Section 4(a)(2) and Rule 506 of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). The shares purchased pursuant to the warrant exercises and the shares purchased were issued bearing restrictive legend and may not be resold by the purchasers unless such securities are registered or an exemption from registration is available. The Company determined, based on representations of the investors, that the investors were “accredited investors” as defined under Rule 501(a) of the Securities Act.

 

  32 
   

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

The Current portion of notes payable on the Company’s Condensed Consolidated Balance Sheets above contains, at June 30, 2016, certain promissory notes on which the Company was in arrears on payments of principal as follows:

 

1. Repayment of a promissory note for $100,000 issued July 29, 2014 to Ira Gaines. The note matured on January 27, 2015. The note earns interest at a rate of 18% per annum. The Company has continued to pay monthly interest on the note since the maturity date.
   
2. Payment of principal aggregating $346,000 on certain promissory notes issued between November 26, 2014 and September 30, 2015, to raise up to $2,000,000 in debt, on which lenders earn interest at a rate of 10% per annum, plus a pro-rata share of 2 percent of the Company’s gross receipts for sales of IRT-103-LDN in perpetuity One of these notes ($60,000), together with interest accrued on the note to March 31, 2016 ($8,183), was converted to equity on August 4, 2016 for 852,292 shares of the Company’s common stock.
   
3. Payment of principal aggregating $198,500 on certain promissory notes issued between May 1, 2015 and September 30, 2015, and maturing between June 14, 2015 and December 31, 2015. Interest is payable in a fixed amount not tied to a specific interest rate.
   
4. Repayment of a promissory note for $200,000 issued January 26, 2015 to R J Dailey. The note matured on June 30, 2015. The note earns interest at a rate of 2% per annum. This note, together with interest accrued to April 1, 2016 ($4,778), was converted on August 4, 2016 to 2,559,725 shares of the Company’s common stock.
   
5. Repayment of a promissory notes aggregating $100,000 issued in December 2015. Lenders earn interest at a rate of 10% per month. Notes were repayable on March 9, 2016. The Company was unable to repay the note at maturity and the note is in default. The Company is obligated to pay late-payment penalties totaling $5,000 per day.

 

At June 30, 2016, the Company had insufficient cash on hand to repay these notes.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

None

 

ITEM 5. OTHER INFORMATION

 

None.

  

ITEM 6. EXHIBITS

 

Exhibit Number   Name of Exhibit
31.1   Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002.
     
32.1   Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002.
     
10.1   Employment Agreement between Immune Therapeutics, Inc. and Robert Wilson dated May 1, 2016.
       
101.INS   XBRL Instance Document
       
101.SCH   XBRL Taxonomy Extension Schema
       
101.CAL   XBRL Taxonomy Extension Calculation Linkbase
       
101.DEF   XBRL Taxonomy Extension Definition Linkbase
       
101.LAB   XBRL Taxonomy Extension Label Linkbase
       
101.PRE    XBRL Taxonomy Extension Presentation Linkbase

 

  33 
   

 

SIGNATURES

 

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  Immune Therapeutics, Inc.    
       
Date: August 15, 2016 By: /s/ Noreen Griffin  
    Noreen Griffin  
    Chief Executive Officer  

 

  Immune Therapeutics, Inc.    
       
Date: August 15, 2016 By: /s/ Peter Aronstam  
    Peter Aronstam  
    Chief Financial Officer  

 

  34 
   

 

EX-10.1 2 ex10-1.htm

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into on May 1, 2016 by and between Immune Therapeutics, Inc., a Florida corporation (“IMUN”), and Robert Wilson (“Employee”), currently residing at 1727 Lake Berry Drive, Winter Park, Florida 32789.

 

WITNESSETH:

 

WHEREAS, IMUN and Employee desire to enter into this Agreement for the employment of Employee by IMUN, effective May 1, 2016 (the “Effective Date”).

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth below and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, IMUN and Employee agree as follows:

 

1. Employment. As of the Effective Date, IMUN hereby employs Employee on an at-will basis as Senior Content and Web Developer , with the duties and responsibilities set forth in Section 3 hereof.

 

2. Term. The term of this Agreement shall commence on the Effective Date and shall continue for one (1) year from the Effective Date (the “Initial Term”) unless terminated sooner as provided in Section 6 below. Unless notice of the intention to terminate this Agreement at the end of the Initial Term is given in writing by IMUN to Employee at least sixty (60) days prior to the end of the Initial Term, or any extended one-year period, then this Agreement shall automatically renew and extend for up to three (3) consecutive one-year periods upon the terms and conditions set forth in this Agreement.

 

3. Duties and Responsibilities.

 

a) Employee shall serve full time as Senior Content and Web Developer to IMUN, and shall have the duties and privileges customarily associated with an employee occupying such role, including website development and maintenance, content development (both online and print), marketing strategies and research, and such other related duties that are requested of Employee. Employee shall perform all reasonable acts customarily associated with such role, or necessary and/or desirable to protect and advance the best interests of IMUN. IMUN shall provide Employee with such reasonable amenities as are necessary for the performance of Employee’s duties hereunder.

 

b) Subject to the prior written approval of IMUN, which approval IMUN agrees shall not unreasonably be withheld, Employee may serve as a member of the board of directors of one other company or charitable organization that is not a competitor of IMUN, provided that Employee’s time commitments to any such charitable organization or other entity do not materially impact on Employee’s abilities to perform Employee’s duties hereunder.

 

4. Compensation.

 

a) IMUN shall pay Employee a base salary of $120,000 on an annualized basis (the “Base Salary”), payable in accordance with IMUN’s payroll procedures, subject to customary withholding of applicable taxes (see Section 11); provided, however, beginning in fiscal year 2017, the Base Salary shall be increased annually by at least that amount that reflects the rate of change in the Consumer Price Index for Urban Consumers (CPl-U, U.S. City Average, All Items) issued by the United States Department of Labor, Bureau of Labor Statistics, for the preceding twelve months. Without in any way limiting the previous sentence, the Base Salary shall be reviewed annually by IMUN’S board of directors (the “Board”) or a committee delegated by the Board to review such matters (the “Compensation Committee”), and in light of such review may be increased, in their sole discretion, taking into account any change in Employee’s responsibilities, performance and any other factors the Board or Compensation Committee deems relevant.

 

b) In addition to the Base Salary, each year, Employee shall be eligible to receive an annual cash bonus in accordance with criteria to be determined by the Board or Compensation Committee, in their sole discretion, which bonus, if any, shall be paid as determined by the Board or Compensation Committee, provided Employee is actively employed by IMUN at December 31 of the applicable bonus year.

 

   
 

 

5. Benefits. Employee shall be eligible to receive the following benefits:

 

a) Medical. Employee shall be eligible to participate in any medical insurance sponsored by IMUN as in effect from time to time.

 

b) Expenses. No later than thirty (30) days after the end of each calendar month, Employee shall provide IMUN with (i) an invoice for reimbursable expenses incurred during such month, and (ii) reasonably detailed back-up documentation relating to the amounts so invoiced (each such invoice and accompanying back-up documentation, collectively, an “Invoice”). Payment of each such Invoice shall be made to Employee no later than the end of the month in which IMUN receives an Invoice, subject to any delays attributable to good faith disputes between the parties regarding any particular Invoice. IMUN shall have no obligation to reimburse Employee for any expenses incurred unless such expenses
have been approved in advance and in writing by IMUN.

 

c) Other Benefits. During the term of this Agreement, Employee shall be eligible to participate in fringe benefits and equity incentive plans, if any, as may be in effect from time to time that are generally available to IMUN’s salaried employees located in the United States and such other fringe benefits and equity incentive plans as the Board or Compensation Committee may approve with respect to Employee, subject in all instances to any eligibility requirements thereof.

 

6. Termination of Employment. Employee’s employment hereunder may be terminated under the following circumstances:

 

a) Death. Employee’s employment hereunder shall automatically terminate upon Employee’s death.

 

b) Total Disability. IMUN may terminate Employee’s employment hereunder upon Employee becoming “Totally Disabled.” For purposes of this Agreement, Employee shall be deemed “Totally Disabled” if Employee is physically or mentally incapacitated as to render Employee incapable of performing his usual and customary duties hereunder. Employee’s receipt of Social Security disability benefits shall be deemed conclusive evidence of total disability for purposes of this Agreement. In the absence of Employee’s receipt of Social Security disability benefits, the Board may, in its reasonable discretion (based upon medical evidence), determine that Employee is Totally Disabled. The inability of Employee to return to work and fulfill his duties and responsibilities, after reasonable accommodation, within six (6) months following an illness shall constitute cause for termination of Employee’s employment hereunder. IMUN shall provide written notice to Employee of any action to terminate his employment hereunder.

 

c) Termination by IMUN for Cause.

 

(i) IMUN may terminate Employee’s employment for Cause at any time. For purposes of this Agreement, the term “Cause”, with respect to Employee, shall mean any of the following: (A) commission by Employee of a felony or of any criminal act (not including traffic misdemeanors) involving moral turpitude which results in a conviction; (B) deliberate and continual refusal to perform satisfactorily in all material respects employment duties not inconsistent with this Agreement and reasonably requested by IMUN which refusal is not cured within thirty (30) calendar days of Employee’s receipt of written notice of such failure;

 

(C) fraud or embezzlement; (D) willful misconduct or negligence having a material adverse effect on IMUN’s business; or (E) a material breach of this Agreement, not cured within thirty (30) days of receipt by Employee of written notice of such breach.

 

(ii) Employee shall be considered to have been terminated for Cause if IMUN determines Employee engaged in an act constituting Cause, regardless of whether Employee voluntarily terminates his employment or is terminated involuntarily.

 

   
 

 

d) Termination by Employee for Good Reason. Employee may terminate his employment hereunder at any time for Good Reason. For purposes of this Agreement, the term “Good Reason” shall mean any of the following: (A) the material breach by IMUN of any of its obligations under this Agreement; (B) a material reduction i n Employee’s Base Salary; or (C) a material diminution in Employee’s authority, duties or responsibilities contemplated by Section 3 hereof. Employee must provide IMUN with written notice of the existence of a condition listed in this Section 6(d) within thirty (30) days of Employee’s knowledge of such condition. IMUN shall have thirty (30) days following the receipt of such notice to remedy the condition. If such condition is remedied to Employee’s reasonable satisfaction within such thirty (30) day period, such condition shall not constitute a Good Reason.

 

e) Voluntary Termination. IMUN may terminate Employee’s employment under this Agreement other than for Cause or under circumstances not involving the death or Total Disability of Employee, on the one hand, and Employee may terminate Employee’s employment under this Agreement other than for Good Reason, on the other hand, in each case at any time for any reason or no reason.

 

f) Notice of Termination. Any termination by IMUN or Employee under this Section 6 shall be (i) in writing, (ii) shall indicate the specific termination provision relied upon to terminate Employee’s employment, and (iii) shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, to the degree applicable.

 

7. Compensation Following Separation from Service.

 

a) Under all circumstances, upon a separation from service, Employee or his estate, as the case may be, shall be entitled to: (i) any accrued but unpaid Base Salary and benefits up to and including the effective date of the separation from service, or, in the case of Employee’s death, accrued to the last day of the month in which the death occurs; and (ii) any payment owed or due Employee, but not yet paid, pursuant to an annual cash bonus described in Section 4(b) hereof.

 

b) In the event of Employee’s separation from service for Good Reason pursuant to Section 6(d) or by IMUN other than for Cause pursuant to Section 6(c), then in any such event, Employee shall be entitled to a lump sum amount equal to Employee’s Base Salary in effect at the time of such separation from service minus the amount of Employee’s Base Salary already paid during the term the separation of service occurred.

 

8. Non-Disclosure.

 

a) From and after the Effective Date, Employee shall not, except as may otherwise be required by law or as may be necessary in the performance of this Agreement, directly or indirectly, disclose or make available, or use or cause to be used in any manner, any Confidential Information (as defined below). Employee agrees that, upon termination of this Agreement or at any other time upon request by IMUN, all Confidential Information in Employee’s possession that is in written or other tangible form, including electronic format (together with all copies or duplicates thereof), shall forthwith be returned to IMUN; provided, however, that Employee shall not be obligated to treat as confidential, or return to IMUN copies of, any Confidential Information that (i) was publicly known at the time of the disclosure to Employee, (ii) became publicly known or available thereafter other than by means in violation of this Agreement or any other binding confidentiality restriction with or for the benefit of IMUN, or (iii) is disclosed to Employee by a third party, provided such third party is not bound by a confidentiality agreement with or for the benefit of IMUN.

 

   
 

 

b) “Confidential Information” shall mean all information and materials relating to IMUN, whether in written, oral, visual, electronic or other form and which are designated as confidential or which, under the circumstances taken as a whole , reasonably would be understood to be confidential, including, but not limited to, the following: (i) discoveries, inventions, unpublished works, research or manufacturing methods, formulae and data; (ii) the specifications, composition, requirements, designs, programming and performance characteristics for instruments, software or other products and services; (iii) business, technical and economic information, product pricing and sales information, marketing plans and forecasts, the existence or terms of this Agreement or agreements between the parties and other parties, commercialization and research and marketing methods or strategies; (iv) yet to be filed or pending patent or trademark applications; and (v) other trade secrets and know-how. Confidential Information shall also include all notes, reports, analyses, forecasts, compilations, studies, interpretations or other documents and materials prepared by Employee to the extent the same contain or reflect IMUN’s Confidential Information.

 

9. Non-Solicitation. Beginning on the Effective Date and continuing for a period of twelve (12) months following the termination of this Agreement and Employee’s employment hereunder for any reason or no reason, Employee agrees that he shall not, directly or indirectly, hire or solicit for hire (a) any current employee or independent contractor of IMUN, or (b) any person or entity that was an employee or independent contractor of IMUN during the six (6) months prior to the termination of this Agreement and Employee’s employment hereunder, in each case whether as an employee or independent contractor, or otherwise disrupt such person’s or entity’s relationship with IMUN. In addition, during such period, Employee shall not induce or seek to induce any customer or business partner of IMUN to cease dealing with IMUN or to restrict or vary the terms upon which it deals with IMUN.

 

10. Non-Competition. Beginning on the Effective Date and continuing for a period of twelve (12) months following the termination of this Agreement and Employee’s employment hereunder for any reason or no reason, Employee agrees that he shall not engage in, operate in whatsoever manner, either directly or indirectly as a principal or agent, owner, employee, partner, shareholder or independent contractor, or acquire any interest, either proprietary or economic or financial, in companies which engage in, IMUN’S business.

 

11. Withholding of Taxes/Section 409A. All payments or benefits under this Agreement are subject to any applicable employment or income tax withholdings or deductions. In addition, this Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements under Section 409A of the Internal Revenue Code of 1986, as amended, and any guidance issued thereunder. Notwithstanding anything to the contrary herein, IMUN does not guarantee the tax treatment of any payments or benefits under this Agreement, including without limitation such tax treatment under the Internal Revenue Code of 1986, as amended, or any federal, state, local or foreign tax laws and regulations.

 

12. Entire Agreement and Amendments. This Agreement shall constitute the entire agreement between the parties and supersedes all existing agreements between them, whether oral or written, with respect to the subject matter hereof. Any waiver, alteration, or modification of any of the provisions of this Agreement, or cancellation or replacement of this Agreement, shall be accomplished in writing and signed by the respective parties.

 

13. Notices. Except as otherwise expressly specified in this Agreement, all notices, requests and other communications required or permitted hereunder shall be in writing and shall be sent by an internationally recognized overnight courier service or by e-mail.

 

To IMUN:

 

Immune Therapeutics, Inc.

37 North Orange Ave., Suite 607
Orlando, Florida 32801

Attn: Kirsten Bartholomew, General Counsel

Email: Kirsten.Bartholomew@immunetherapeutics.com

 

To Employee:

 

At Employee’s address set forth above
Email: robert.wilson@pixelheads.net

 

   
 

 

Any party may designate a different notice address, contact person, or e-mail address with respect to such party by providing a notice describing such changes to the other party hereto in accordance with the provisions of this Section 13. Any notice sent by internationally recognized overnight mail courier service shall be deemed to be delivered to the address shown on the mailing receipt on the expected date of delivery upon proper evidence of mailing for purposes of this Section 13. Any notice sent by e-mail shall be deemed delivered as of the open of business on the business day following the date on which such notice was sent provided that within 48 hours such notice is also sent by an internationally-recognized overnight mail courier service to the appropriate address specified above. As used in this Section 14, “business day” means any day other than a day on which banking institutions in the State of New York are legally closed for business.

 

14. Governing Law; Jurisdiction. This Agreement shall be construed in accordance with, and the rights of the parties shall be governed by, the laws of State of Florida, without giving effect to principles of conflicts of law. The parties hereto consent to the exclusive jurisdiction of the state and federal courts located in the State of Florida with respect to all claims and disputes between or among the parties hereto with respect to the subject matter hereof.

 

15. Arbitration. Any dispute or claim between the parties hereto arising out of, or, in connection with this Agreement, shall, upon written request of either party, become a matter for arbitration; provided, however, Employee acknowledges that in the event of any violation of Section 8, Section 9 or Section 1 0 hereof, IMUN shall be entitled to obtain from any court in the State of Florida, temporary, preliminary or permanent injunctive relief as well as damages, which rights shall be in addition to any other rights or remedies to which it may be entitled. The arbitration shall be before a neutral arbitrator in accordance with the National Rules for the Resolution of Employment Disputes (as modified) of the American Arbitration Association and shall take place in Orlando, Florida. Each party shall bear its own fees, costs and disbursements in such proceeding unless the arbitrator awards fees pursuant to a statute authorizing the award of such fees. The decision or award of the arbitrator shall be final and binding upon the parties hereto. The parties shall abide by all awards recorded in such arbitration proceedings, and all such awards may be entered and executed upon in any court having jurisdiction over the party against whom or which enforcement of such award is sought.

 

16. Severability. If any term or provision of this Agreement is declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, such term or provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect.

 

17. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and when taken together shall constitute one agreement.

 

18. Assignment. The rights and benefits of Employee under this Agreement, other than accrued and unpaid amounts due under Section 4 hereof, are personal to Employee and are not assignable. IMUN may assign this Agreement to an affiliate of IMUN, provided that such affiliate assumes IMUN’s obligations under this Agreement; provided, further, that if IMUN merges or effects a consolidation or share exchange with or into, or sells or otherwise transfers substantially all its assets to, another business entity, IMUN may assign its rights hereunder to that business entity without the consent of Employee provided that it causes such business entity to assume IMUN’s obligations under this Agreement.

 

19. Waiver. No waiver of any party hereto of a breach of any provision of this Agreement by any other party shall operate or be construed as a waiver of any subsequent breach by such other party. The failure of any party hereto to take any action by reason of such breach shall not deprive such party of the right to take action at any time while such breach continues.

 

   
 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by the undersigned duly authorized persons as of the Effective Date.

 

IMUN:   EMPLOYEE:
     
IMMUNE THERAPEUTICS, INC.    
     
By: Chris Pearce, Chief Operating Officer   Robert Wilson

 

   
 

 

 

EX-31.1 3 ex31-1.htm

 

CERTIFICATION

I, Noreen Griffin, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Immune Therapeutics, Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15-d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting..

 

Date: August 15, 2016 By: /s/ Noreen Griffin
    Noreen Griffin
    Chief Executive Officer
    (Principal Executive Officer)

 

 
 

 

I, Peter Aronstam, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Immune Therapeutics, Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15-d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 15, 2016 By: /s/ Peter Aronstam
    Peter Aronstam
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

 
 

 

 

EX-32.1 4 ex32-1.htm

 

CERTIFICATION

 

In connection with the periodic report of Immune Therapeutics, Inc. (the “Company”) on Form 10-Q for the quarter ending June 30, 2016 as filed with the Securities and Exchange Commission (the “Report”), we, Noreen Griffin, Chief Executive Officer (Principal Executive Officer) and Peter Aronstam, Chief Financial Officer (Principal Financial and Accounting Officer) of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of our knowledge:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

 

Date: August 15, 2016 By: /s/ Noreen Griffin
    Noreen Griffin
    Chief Executive Officer
    (Principal Executive Officer)
     
  By: /s/ Peter Aronstam
    Peter Aronstam
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

 
 

 

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Common Stock and Common Stock Purchase Warrants Equity [Abstract] Stock Compensation Income Tax Disclosure [Abstract] Income Taxes - Results of Operations Licenses and Supply Agreements Commitments and Contingencies Disclosure [Abstract] Commitments and Contingencies Subsequent Events [Abstract] Subsequent Events Summary Of Significant Accounting Policies Policies Basis of Presentation Use of Estimates Cash, Cash Equivalents, and Short-term Investments Concentration of Credit Risk Segment and Geographic Information Fair Value of Financial Instruments Fair Value Measurements Property and Equipment Intangible Assets Impairment of Long-lived Assets Research and Development Costs Income Taxes Stock-Based Compensation and Issuance of Stock for Non-Cash Consideration Non-controlling Interest Net Loss Per Share Recent Accounting Standards Summary Of Significant Accounting Policies Tables Schedule of Basic and Diluted Net Loss Per Share Schedule of Antidilutive Securities Property And Equipment Tables Schedule of Property and Equipment Accrued Liabilities Tables Schedule of Accrued Liabilities Notes Payable Tables Schedule of Notes Payable Capital Structure - Common Stock And Common Stock Purchase Warrants Tables Schedule of Outstanding Stock Warrants Summary of Outstanding Warrants Number of shares issued druing period Percentage of stake issued during period Percentage of low corporate income tax rate Net loss Cash equivalents Stockholders equity Maximum of annual gross revenue Federal deposit insurance corporation value Depreciation expense Amortization expense Impairment loss Summary Of Significant Accounting Policies - Schedule Of Basic And Diluted Net Loss Per Share Details Numerator, Net loss Numerator, Net loss attributed to Common stockholders Denominator, Weighted-average common shares outstanding-Denominator for basic and diluted net loss per share Denominator, Basic and diluted net loss per share attributed to common stockholders Summary Of Significant Accounting Policies - Schedule Of Antidilutive Securities Details Warrants to purchase Common stock Property And Equipment Details Narrative Depreciable asset lives Property And Equipment - Schedule Of Property And Equipment Details Computer equipment Less accumulated depreciation Property and equipment, net Accrued Liabilities - Schedule Of Accrued Liabilities Details Accrued payroll to officers and others Accrued interest and penalties - notes payable Accrued legal settlements Other accrued liabilities Total accrued expenses and other liabilities Notes Payable Details Narrative Accrued unpaid interest Penalties Total Less: Original issue discounts on notes payable and warrants issued with notes Less: Current portion Long-Term debt, less current portion Note matures date Percentage of interest rate per annum Maximum amount raise in debt Number of installments, months Notes aggregating default amount Accrued interest Value of notes that converted into shares Notes and interest converted into shares Aggregating loan Interest payable Pay late-payment penalties per day Number of warrants issued during period Warrant maturity date Number of existing warrant issued shares Warrant Expiry date Warrant extented date Warrant term Warrants exercise price per share Warrants, Number of shares Beginning balance Warrants, Number of shares Issued Warrants, Number of shares Expired Warrants, Number of shares Exercised Warrants, Number of shares Ending balance Exercise Price, Beginning balance Exercise Price, Issued Exercise Price, Expired Exercise Price, Exercised Exercise Price, Ending balance Weighted average exercise price, Beginning balance Weighted average exercise price, Issued Weighted average exercise price, Expired Weighted average exercise price, Exercised Weighted average exercise price, Ending balance Number of Shares Exercise Price Lower Limit Exercise Price Upper Limit Remaining Life (years) Number of common stock issued for consulting fees Fair value of common stock Consulting fees amortized period Amortization of prepaid services Income Taxes - Results Of Operations Details Narrative Effective tax rate Deferred tax assets Operating loss carryforwards Operating loss carryforwards expire term Initial supply, description Initial capital to venture Percentage of allocated income from venture Cash rental expense Notes payable Notes due date Change in notes payable Interest accrued Number of stock issued for debt conversion Notes interest rate percentage Proceeds fom notes payable Convertible threshold percentage Shares issued for service, shares Number of warrants issued Exercise price of warrant Agreement [Axis] Agreements With Hubei Qianjiang Pharmaceutical Company [Member] Amortization of stock issued for prepaid services. 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Document and Entity Information - shares
6 Months Ended
Jun. 30, 2016
Aug. 12, 2016
Document And Entity Information    
Entity Registrant Name Immune Therapeutics, Inc.  
Entity Central Index Key 0001559356  
Document Type 10-Q  
Document Period End Date Jun. 30, 2016  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   220,989,542
Trading Symbol IMUN  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2016  
XML 12 R2.htm IDEA: XBRL DOCUMENT v3.5.0.2
Condensed Consolidated Balance Sheets - USD ($)
Jun. 30, 2016
Dec. 31, 2015
Current Assets:    
Cash and cash equivalents $ 64,289 $ 23,149
Accounts receivable 2,661 16,197
Prepaids and other current assets 11,272
Total current assets 78,222 39,346
Fixed Assets:    
Computer equipment, net of accumulated depreciation of $7,312 and $6,331 respectively 701 1,682
Deposits 200 200
Total assets 79,123 41,228
Current Liabilities:    
Accounts payable 1,517,788 1,924,672
Accrued liabilities 2,030,559 1,281,039
Current portion of notes payable 3,457,436 2,793,701
Total current liabilities 7,005,783 5,999,412
Non-current liabilities:    
Notes payable, less current portion
Total non-current liabilities
Total liabilities 7,005,783 5,999,412
Commitments and Contingencies (Note 10)
Stockholders' Deficit:    
Common stock - par value $0.0001; 500,000,000 shares authorized; 214,447,611 and 174,850,047 shares issued and outstanding respectively 21,445 17,485
Additional paid in capital 354,333,473 343,434,786
Stock issuances due 1,275,838 1,140,303
Prepaid services (1,983,024) (660,417)
Accumulated deficit (358,319,891) (347,789,889)
Deficit attributable to common shareholders (4,672,159) (3,857,732)
Non-controlling interest (2,254,501) (2,100,452)
Total stockholders' deficit (6,926,660) (5,958,184)
Total liabilities and stockholders' deficit $ 79,123 $ 41,228
XML 13 R3.htm IDEA: XBRL DOCUMENT v3.5.0.2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
Jun. 30, 2016
Dec. 31, 2015
Statement of Financial Position [Abstract]    
Accumulated depreciation $ 7,312 $ 6,331
Common Stock, Par Value $ 0.0001 $ 0.0001
Common Stock, Shares Authorized 500,000,000 500,000,000
Common Stock, Shares Issued 214,447,611 174,850,047
Common Stock, Shares Outstanding 214,447,611 174,850,047
XML 14 R4.htm IDEA: XBRL DOCUMENT v3.5.0.2
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Income Statement [Abstract]        
Revenues, net $ 5,648 $ 3,463 $ 7,718
Operating expenses        
Selling, general and administrative 893,917 443,585 1,833,258 845,572
Research and development expense 67,262 414,492 48,420 591,650
Stock issued for services G&A 1,194,761 1,450,334 3,178,598 3,611,893
Warrant valuation 490,355 2,568,554
Depreciation and amortization expense 434 148,726 981 297,452
Total operating expenses 2,646,729 2,457,137 7,629,811 5,346,567
Loss from operations (2,646,729) (2,451,489) (7,626,348) (5,338,849)
Other income (expense):        
Interest expense (1,051,576) (50,711) (1,353,020) (68,757)
Loss on settlement of debt (340,343) (88,445) (1,704,683) (88,445)
Total other income (expense) (1,391,919) (139,156) (3,057,703) (157,202)
Net (loss) (4,038,648) (2,590,645) (10,684,051) (5,496,051)
Net (loss) attributable to non-controlling interest (109,929) (138,891) (154,049) (262,956)
Net (loss) attributable to common shareholders $ (3,928,719) $ (2,451,754) $ (10,530,002) $ (5,233,095)
Basic and diluted loss per share attributable to common shareholders $ (0.02) $ (0.02) $ (0.05) $ (0.04)
Weighted average number of shares outstanding 207,229,469 147,387,763 199,076,428 142,563,007
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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - 6 months ended Jun. 30, 2016 - USD ($)
Common Stock [Member]
Additional Paid-In Capital [Member]
Stock to Be Issued [Member]
Prepaid Service [Member]
Accumulated Deficit [Member]
Non-controlling Interest [Member]
Total
Balance at Dec. 31, 2015 $ 17,485 $ 343,434,786 $ 1,140,303 $ (660,417) $ (347,789,889) $ (2,100,452) $ (5,958,184)
Balance, shares at Dec. 31, 2015 174,850,047            
Issuance of common stock for prepaid services $ 2,349 4,518,321 (19,466) (2,862,535) 1,638,669
Issuance of common stock for prepaid services, shares 23,493,000            
Amortization of prepaid services 1,539,928 1,539,928
Issuance of common stock for interest expense $ 90 148,910 $ 149,000
Issuance of common stock for interest expense,shares 896,296           896,296
Issuance of common stock for legal fees $ 15 22,485         $ 22,500
Issuance of common stock for legal fees,shares 150,000            
Issuance of common stock in exchange for debt $ 1,444 2,907,814 155,001 3,064,259
Issuance of common stock in exchange for debt, shares 14,433,268            
Debt discount 682,665 682,665
Issuance of common stock for cash and exercise of warrants $ 62 49,938 50,000
Issuance of common stock for cash and exercise of warrants, shares 625,000            
Issuance and modification of stock warrants 2,568,554 2,568,554
Net loss (10,530,002) (154,049) (10,684,051)
Balance at Jun. 30, 2016 $ 21,445 $ 354,333,473 $ 1,275,838 $ (1,983,024) $ (358,319,891) $ (2,254,501) $ (6,926,660)
Balance, shares at Jun. 30, 2016 214,447,611            
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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES    
Net loss $ (10,684,051) $ (5,496,051)
Adjustments to reconcile net loss to net cash flows used in operating activities:    
Depreciation 981 1,335
Amortization 296,117
Stock issued, and amortization of stock issued, for prepaid services 1,539,928 3,530,894
Loss on settlement of debt 1,704,683 600,562
Stock issued for services 1,661,169
Stock issued for legal settlement 81,000
Amortization of debt discount 385,288
Stock warrant expense 2,568,554
Stock (returned) issued for donation
Stock issued for interest 149,000
Changes in operating assets and liabilities:    
Accounts payable 104,131 (158,931)
Accounts receivable 13,536 (7,718)
Accrued liabilities 1,168,324 (112,285)
Prepaid expenses and deposits (11,272)
Net cash used in operating activities (1,399,729) (1,265,077)
CASH FLOWS FROM INVESTING ACTIVITIES    
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from sale of stock and exercise of warrants 50,000 152,000
Proceeds from issuance of notes payable 1,390,869 943,475
Net cash provided by financing activities 1,440,869 1,095,475
Net increase (decrease) in cash 41,140 (169,602)
Cash and cash equivalents at beginning of period 23,149 191,987
Cash and cash equivalents at end of period 64,289 22,385
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:    
Cash paid for interest 10,317 7,500
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Conversion of debt and accrued interest to common stock 3,064,259 600,562
Non-controlling interest $ 154,049 $ 262,956
XML 17 R7.htm IDEA: XBRL DOCUMENT v3.5.0.2
Organization and Description of Business
6 Months Ended
Jun. 30, 2016
Accounting Policies [Abstract]  
Organization and Description of Business

1. Organization and Description of Business

 

Immune Therapeutics, Inc. (the “Company”) was initially incorporated in Florida on December 2, 1993 as Resort Clubs International, Inc. (“Resort Clubs”). It was formed to manage and market golf course properties in resort markets throughout the United States. Galliano International Ltd. (“Galliano”) was incorporated in Delaware on May 27, 1998 and began trading in November 1999 through the filing of a 15C-211. On November 10, 2004, Galliano merged with Resort Clubs. Resort Clubs was the surviving corporation. On August 23, 2010, Resort Clubs changed its name to pH Environmental Inc. (“pH Environmental”).

 

On April 23, 2012, pH Environmental completed a name change to TNI BioTech, Inc., and on April 24, 2012, we executed a share exchange agreement for the acquisition of all of the outstanding shares of TNI BioTech IP, Inc. On September 4, 2014, a majority of our shareholders approved an amendment to our Amended and Restated Articles of Incorporation, as amended, to change our name to Immune Therapeutics, Inc. We filed our name change amendment with the Secretary of State of Florida on October 27, 2014 changing our name to Immune Therapeutics, Inc.

 

The Company currently operates out of Orlando, Florida. In July 2012, the Company’s focus turned to acquiring patents that would protect and advance the development of new uses of opioid-related immune- therapies, such as low dose naltrexone (“LDN”) and Methionine [Met5]-enkephalin (“MENK”). Today, the Company is focused on the development and commercialization of therapeutic treatments for cancer, HIV/AIDS, malaria, and opportunistic infections arising from their treatment, and commercializing affordable, non-toxic therapies in Africa, to be followed by Asia and South America, and autoimmune diseases and immune disorders by combating these severe and fatal diseases through the stimulation and/or regulation of the body’s immune system. The Company’s therapies are believed to stimulate and/or regulate the immune system in such a way that they provide the potential to treat a variety of diseases. We believe our therapies may be able to correct abnormalities or deficiencies in the immune system in diseases such as HIV infection, autoimmune disease, immune disorders, or cancer; all of which can lead to disease progression and life-threatening situations when the immune system is not functioning optimally.

 

In October 2012, the Company formed TNI BioTech International, Ltd., a BVI company in Tortola, British Virgin Islands, which was set up to allow the Company to market and sell LDN in those countries outside the U.S. in which we have been able to obtain approval to sell the Company’s products.

 

In August 2013, the Company formed its United Kingdom subsidiary, TNI BioTech, LTD (the “UK Subsidiary”). The UK Subsidiary received approval to be considered a micro, small or medium-sized enterprise (“SME”) with the European Medicines Agency (“EMA”) on August 21, 2013. The designation provides the UK Subsidiary with significant discounts when holding meetings or submitting filings to the EMA. On September 19, 2013, the UK Subsidiary submitted a pre-submission package to the EMA regarding Crohn’s Disease. The EMA granted the UK Subsidiary a meeting that took place on September 27, 2013. The UK Subsidiary is eligible to benefit from the provisions for administrative and financial assistance for SMEs set out in Regulation (EC) No 2049/2005. The Company will apply to obtain EMA benefits once funding becomes available.

 

In December 2013, the Company formed a new subsidiary, Cytocom Inc. (“Cytocom”). Cytocom is a clinical-stage pharmaceutical company focused on the development of the first affordable non-toxic immunodulator for the treatment of inflammatory diseases, immune-related disorders, and cancer, and is responsible for the development of the Company’s patented therapies under the auspices of the FDA and EMA. In December 2014, the Company finalized the distribution of common stock of Cytocom to its shareholders. As part of the transaction, the Company retained exclusive rights to all international patents, in-country approvals, formulations, trademarks, manufacturing, marketing, sales, and distributions rights in emerging nations, including Africa, Central America, South America, Russia, India, China, Far East, and The Commonwealth of Independent States (former Soviet Union). The Company will continue to have access to existing clinical data as well as any new data generated by Cytocom during drug development. On December 8, 2014, the number of Cytocom shares of common stock that were issued to our shareholders totaled 113,242,522 shares. In connection with the transaction, Cytocom issued 140,100,000 shares of its common stock to the Company, which gave the Company a 55.3% equity interest in Cytocom on that date. In April 2016, the Board of Directors and a majority of shareholders of Cytocom approved a reverse stock split of Cytocom’s outstanding common stock with one new share of stock for each twenty old shares of common stock. Cytocom effectuated and finalized the reverse split in June 2016. At June 30, 2016, the Company’s equity interest had been further reduced to 41%, by subsequent issuances of Cytocom common stock to shareholders in settlement of notes payable.

 

In March 2014, the Company incorporated Airmed Biopharma Limited, an Irish corporation with an address in Dublin, Ireland, and Airmed Holdings Limited, an Irish company domiciled in Bermuda. The Irish companies were set up to benefit from incentives granted by the Irish government for the establishment of pharmaceutical companies (many of the world’s leading pharmaceutical companies have located in Ireland), and so that the Company could take advantage of Ireland’s status as a member of the European Union and the European Economic Area. An Irish limited liability company enjoys a low corporate income tax rate of 12.5%, one of the lowest in the world. The Irish-domiciled company hopes to qualify for tax incentives for Irish holding/headquartered companies and to benefit from the network of double tax treaties that reduce withholding taxes. TNI BioTech International, Ltd. will manage our international distribution, using product that is manufactured in Ireland and elsewhere.

 

Going Concern

 

The Company has incurred significant net losses since inception and has relied on its ability to fund its operations through private equity financings. Management expects operating losses and negative cash flows to continue at more significant levels in the future. As the Company continues to incur losses, transition to profitability is dependent upon the successful development, approval, and commercialization of its product candidate and the achievement of a level of revenues adequate to support the Company’s cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional cash. Management intends to fund future operations through additional private or public debt or equity offerings, and may seek additional capital through arrangements with strategic partners or from other sources. Based on the Company’s operating plan, existing working capital at December 31, 2015 was not sufficient to meet the cash requirements to fund planned operations through December 31, 2016 without additional sources of cash. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business.

 

The Company experienced a net loss from operations of $(7,626,348) and used cash and cash equivalents from operations in the amount of $1,399,729) during the six months ended June 30, 2016, resulting in stockholders equity of $(6,926,660) at June 30, 2016.

XML 18 R8.htm IDEA: XBRL DOCUMENT v3.5.0.2
Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2016
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring adjustments, unless otherwise indicated) necessary to present fairly the financial position and results of operations for the periods presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2015 (including the notes thereto) set forth in Form 10-K/A.

 

The Company qualifies as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue for the year ended December 31, 2015. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.

 

Use of Estimates

 

The preparation of the Company’s financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from such estimates.

 

Cash, Cash Equivalents, and Short-Term Investments

 

The Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include bank demand deposits, marketable securities with maturities of three months or less at purchase, and money market funds that invest primarily in certificates of deposits, commercial paper and U.S. government and U.S. government agency obligations. Cash equivalents are reported at fair value.

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company is exposed to credit risk, subject to federal deposit insurance, in the event of a default by the financial institutions holding its cash and cash equivalents to the extent of amounts recorded on the balance sheets. The cash accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. At June 30, 2016, the Company has no uninsured cash balances.

 

Segment and Geographic Information

 

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment and does not segment the business for internal reporting or decision making.

 

Fair Value of Financial Instruments

 

In accordance with the reporting requirements of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 825, “Financial Instruments”, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this standard and includes this additional information in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments. Cash and cash equivalents, accounts receivable and accounts payable are accounted for at cost which approximates fair value due to the relatively short maturity of these instruments. The carrying value of notes payable also approximates fair value since they bear market rates of interest and other terms. None of these instruments are held for trading purposes.

 

Fair Value Measurements

 

The ASC Topic 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value in accordance with U.S. generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the customer’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time.

 

Property and Equipment

 

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is determined on a straight-line basis over the estimated useful lives of the assets, which generally range from three to five years. Maintenance and repairs are charged against expense as incurred. Depreciation expense for the quarters ended June 30, 2016 and June 30, 2015 was $434 and $667, respectively.

 

Intangible Assets

 

Costs incurred to acquire and/or develop the Company’s product licenses and patents are capitalized and amortized by straight-line methods over estimated useful lives of seven to sixteen years. Intangible assets are stated at the lower of cost or estimated fair market value. At the end of 2015, the Company determined that the unamortized carrying amount recorded for the acquisition of licenses and patents related to LDN were impaired, and recorded an impairment loss of $5,226,352. In 2014, the Company determined that the carrying amount recoded for the acquisition of licenses and patents related to MENK were impaired, and recorded an impairment loss of $9,908,477.

 

During the quarters ended June 30, 2016 and June 30, 2015, the Company did not capitalize any costs to acquire and/or develop the Company’s product licenses and patents. (See Note 10). Amortization expense for the quarters ended June 30, 2016 and June 30, 2015 was $0 and $148,059, respectively.

 

Impairment of Long-Lived Assets

 

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable as prescribed by ASC Topic 360-10-05, “Property, Plant and Equipment.” If the carrying amount of the asset, including any intangible assets associated with that asset, exceeds its estimated undiscounted net cash flow, before interest, the Company will recognize an impairment loss equal to the difference between its carrying amount and its estimated fair value. No impairment losses were recognized for the quarters ended June 30, 2016 and June 30, 2015.

 

Research and Development Costs

 

Research and development costs are charged to expense as incurred and are typically comprised of salaries and benefits, pre-clinical studies, clinical trial activities, drug development and manufacturing, fees paid to consultants and other entities that conduct certain research and development activities on the Company’s behalf and third-party service fees, including clinical research organizations and investigative sites. Costs for certain development activities, such as clinical trials are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided by vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as operating expenses.

 

Income Taxes

 

The Company follows FASB ASC Topic 740, “Income Taxes,” which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the asset will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

 

The standard addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC Topic 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. At the date of adoption, and as of December 31, 2015 and June 30, 2016, the Company does not have a liability for unrecognized tax uncertainties.

 

The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. At the end of the quarters ended June 30, 2016 and June 30, 2015, the Company had not accrued any interest or penalties related to uncertain tax positions.

 

Stock-Based Compensation and Issuance of Stock for Non-Cash Consideration

 

The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors, including employee stock options, based on estimated fair values equaling either the market value of the shares issued or the value of consideration received, whichever is more readily determinable. The majority of the non-cash consideration pertains to services rendered by consultants and others and has been valued at the fair market value of the Company’s common stock at the date of the agreement.

 

The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC Topic 505-50, “Equity-Based Payments to Non-Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete.

 

Non-controlling Interest

 

In accordance with ASC 810, Consolidation, the Company consolidates Cytocom, Inc. The non-controlling interests in Cytocom represent the interests of outside shareholders in the equity and results of operations of Cytocom.

 

Net Loss per Share

 

Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method and the if-converted method. Dilutive common stock equivalents are comprised of common stock purchase warrants and options outstanding. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

 

A calculation of basic and diluted net loss per share follows:

 

    For the three months ended
June 30,
    For the six months ended
June 30,
 
    2016     2015     2016     2015  
Net loss per share:                        
Numerator                                
Net loss   $ (4,038,648 )   $ (2,590,645 )   $ (10,684,051 )   $ (5,496,051 )
Net loss attributed to Common stockholders   $ (3,928,719 )   $ (2,451,754 )   $ (10,530,002 )   $ (5,233,095 )
                                 
Denominator                                
Weighted-average common shares outstanding—                                
Denominator for basic and diluted net loss per share     207,229,469       147,387,763       199,076,428       142,563,007  
Basic and diluted net loss per share attributed                                
 to common stockholders   $ (0.02 )   $ (0.02 )   $ (0.05 )   $ (0.04 )

 

The Company’s potential dilutive securities which include stock, stock warrants and convertible debt have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average Common stock outstanding used to calculate both basic and diluted net loss per share is the same.

 

The following shares of potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as the effect of including such securities would be antidilutive:

  

    As of June 30,  
    2016     2015  
Warrants to purchase Common stock     32,748,908       9,372,750  
      32,748,908       9,372,750  

 

Recent Accounting Standards

 

During the quarter ended June 30, 2016, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

 

The Company qualifies as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue and did not have such amount as of December 31, 2015, our last fiscal year. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.

XML 19 R9.htm IDEA: XBRL DOCUMENT v3.5.0.2
Property and Equipment
6 Months Ended
Jun. 30, 2016
Fixed Assets:  
Property and Equipment

3. Property and Equipment

 

    June 30, 2016     December 31, 2015  
Property and equipment:                
Computer equipment   $ 8,013     $ 8,013  
                 
Less accumulated depreciation     (7,312 )     (6,331 )
                 
Property and equipment, net   $ 701     $ 1,682  

 

The Company utilizes the straight-line method for depreciation, using three to five-year depreciable asset lives. Depreciation expense was not material for all periods presented.

XML 20 R10.htm IDEA: XBRL DOCUMENT v3.5.0.2
Accrued Liabilities
6 Months Ended
Jun. 30, 2016
Payables and Accruals [Abstract]  
Accrued Liabilities

4. Accrued Liabilities

 

Accrued expenses and other liabilities consist of the following:

 

    June 30, 2016     December 31, 2015  
    (in thousands)  
Accrued payroll to officers and others   $ 1,013     $ 758  
Accrued interest and penalties - notes payable     843       237  
Accrued legal settlements     174       282  
Other accrued liabilities     1       4  
Total accrued expenses and other liabilities   $ 2,031     $ 1,281  

 

XML 21 R11.htm IDEA: XBRL DOCUMENT v3.5.0.2
Notes Payable
6 Months Ended
Jun. 30, 2016
Debt Disclosure [Abstract]  
Notes Payable

5. Notes Payable

 

Notes payable consist of the following:

     June 30, 2016      December 31, 2015  
Promissory note issued July 29, 2014 to Ira Gaines. The note matures on January 27, 2015 and earns interest at a rate of 18% per annum. The Company was unable to repay the note at maturity and the note is in default, although no demand for repayment has been made by the lender.   $ 100,000     $ 100,000  
                 
Promissory notes issued between November 26, 2014 and September 30, 2015, to raise up to $2,000,000 in debt. Lenders earn interest at a rate of 10% per annum, plus a pro-rata share of two percent of the Company’s gross receipts for sales of IRT-103-LDN in perpetuity. Notes will be repaid in 36 monthly installments of principal and interest commencing no later than October 15, 2015. Notes aggregating $346,000 were in default at June 30, 2015, as the Company was unable to pay installments on those notes on their due dates. No demands for repayment have been made by the lenders. One of these notes ($60,000), together with interest accrued on the note to March 31, 2016 ($8,183), was converted to equity on August 4, 2016 for 852,292 shares of the Company’s common stock. In addition, the note holder agreed to waive future payments of his pro-rata share of two percent of the Company’s gross receipts for sales of LodonalTM in perpetuity in return for 187,500 shares of the common stock of Cytocom.     346,000       711,500  
                 
Promissory note issued October 17, 2014 to Roger Bozarth. The note matures on October 17, 2015 and earns interest at a rate of 2% per annum. The Company was unable to repay the note at maturity and the note is in default, although no demand for repayment has been made by the lender.     -       7,000  
                 
Promissory notes issued between May 1, 2015 and June 30, 2016, and maturing between June 14, 2015 and June 30, 2017. Lenders on loans aggregating $834,927 earn interest at rates between 10% and 18% per annum. On loans aggregating $198,500, interest is payable in a fixed amount not tied to a specific interest rate. One of these notes ($278,933), together with interest accrued to April 1, 2016 ($18,888), was converted on August 4, 2016 to 3,722,013 shares of the Company’s common stock. Notes aggregating $223,500 were in default at June 30, 2016, as the Company was unable to repay those notes on their due dates. No demands for repayment have been made by the lenders.     1,033,427       669,933  
                 
Promissory note issued January 26, 2015 to Robert J. Dailey. The note is senior to, and has priority in right of payment over, all indebtedness of the Company. The note earns interest at a rate of 2% per annum and was due on July 30, 2015. The Company was unable to repay the note at maturity and the note is in default, although no demand for repayment has been made by the lender. This note, together with interest accrued to April 1, 2016 ($4,778), was converted on August 4, 2016 to 2,559,725 shares of the Company’s common stock.     200,000       200,000  
                 
Promissory notes issued by Cytocom Inc. between April 29, 2015 and December 31, 2015. Lenders earn interest at rates between 5% and 10% per annum. These notes mature on September 30, 2016. One of these notes ($350,000), together with interest accrued on the note to March 31, 2016 ($11,304), was converted to equity on August 4, 2016 for 4,516,302 shares of the Company’s common stock.     775,000       800,000  
                 
Promissory notes issued in December 2015. Lenders earn interest at a rate of 10% per month. Notes are repayable on March 9, 2016. The Company was unable to repay the note at maturity and the note is in default. The Company is obligated to pay late-payment penalties totaling $5,000 per day.     100,000       130,000  
                 
Promissory note issued November 24, 2015 as settlement of amounts owing to a law firm. The Lender earns interest at the rate of 10% per annum. The note is repayable in full on December 1, 2016. This note, together with interest accrued on the note to July 19, 2016 ($10,536), was converted to equity on July 19, 2016 for 1,235,356 shares of the Company’s common stock.     175,268       175,268  
                 
Promissory notes issued between April 6, 2016 and June 2, 2016 that mature between October 1, 2016 and January 31, 2017, and include stock conversion features, warrants and original issue debt discounts.     1,161,250       -  
                 
Promissory notes issued to an officer of the Company effective November 3, 2015 and maturing November 3, 2016 for settlement of accrued payroll, bearing interest at 10% per annum and including a stock conversion feature. One of these notes ($50,000), together with interest accrued on the note to July 19, 2016 ($3,479), was converted to equity on July 19, 2016 for 1,069,589 shares of the Company’s common stock.     162,737       -  
                 
Less: Original issue discounts on notes payable and warrants issued with notes.     (596,246 )     -  
                 
Total     3,457,436       2,793,701  
                 
Less: Current Portion   $ (3,457,436 )   $ (2,793,701 )
                 
Long-Term debt, less current portion   $ -     $ -  

 

As of June 30, 2016, the Company had accrued $843 in unpaid interest, compared to $236,671 as of December 31, 2015. These amounts included default of penalties of $581,324 at June 30, 2016, compared to $18,954 at December 31, 2015. During the six months ended June 30, 2016, 896,296 shares with a fair value of $149,000 were issued by the Company for interest expense under promissory notes.

XML 22 R12.htm IDEA: XBRL DOCUMENT v3.5.0.2
Capital Structure - Common Stock and Common Stock Purchase Warrants
6 Months Ended
Jun. 30, 2016
Notes to Financial Statements  
Capital Structure - Common Stock and Common Stock Purchase Warrants

6. Capital Structure—Common Stock and Common Stock Purchase Warrants

 

Each holder of common stock is entitled to vote on all matters and is entitled to one vote for each share held. No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock or any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.

 

As of June 30, 2016 and 2015, the Company was authorized to issue 500,000,000 common shares at a par value of $0.0001 per share.

 

As of June 30, 2016, the Company had 214,447,611 shares of common stock outstanding, and 174,850,047 outstanding as of December 31, 2015.

 

Stock Warrants

 

In the quarter ended June 30, 2016, the Company issued 23,654,908 warrants.

 

In the quarter ended June 30, 2016, the Company extended to December 31, 2018 the maturity dates on 5,006,666 existing warrants that were originally issued with expiration dates between July 25, 2016 to December 17, 2018. These warrants were originally issued with 3 to 5 year terms, with exercise prices ranging between $0.75 and $1.00.

 

There were no modifications of the terms of any warrants issued by the Company in the quarter ended June 30, 2015.

 

Following is a summary of outstanding stock warrants at June 30, 2016 and activity during the six months then ended:

 

    Number of Shares     Exercise Price     Weighted Average Price  
                   
Warrants as of December 31, 2015     9,131,500        $ 0.07-15.00     $ 1.47  
                         
Issued in 2016     23,654,908        $ 0.14-2.00     $ 0.32  
                         
Expired     (37,500 )   $ 5.00     $ 5.00  
                         
Exercised     (0 )   $ 0     $ 0  
                         
Warrants as of June 30, 2016     32,748,908     $   0.07-15.00     $ 0.54  

 

Summary of outstanding warrants as of June 30, 2016:

 

Expiration Date   Number of
Shares
    Exercise
Price
    Remaining
Life (years)
 
                   
Third Quarter 2016     125,000     $ 5.00       .25  
Fourth Quarter 2017     350,000       1.50-9.00       1.50  
First Quarter 2018     127,500     $ 15.00       1.75  
Second Quarter 2018     33,334     $ 15.00       2.00  
Third Quarter 2018     250,000     $ 1.50       2.25  
Fourth Quarter 2018     6,089,166     $ 1.00-1.50       2.50  
First Quarter 2019     4,024,000     $ 0.50-2.00       2.75  
Second Quarter 2019     135,000     $ 0.07–0.23       3.00  
Third Quarter 2019     260,000     $ 0.50-1.50       3.25  
Fourth Quarter 2019     400,000     $ 0.14       3.50  
Second Quarter 2020     300,000     $ 0.50       4.00  
Third Quarter 2020     1,000,000     $ 0.20       4.25  
Fourth Quarter 2020     12,650,000     $ 0.20       4.50  
First Quarter 2021     7,004,908     $ 0.10-0.20       4.75  

 

XML 23 R13.htm IDEA: XBRL DOCUMENT v3.5.0.2
Stock Compensation
6 Months Ended
Jun. 30, 2016
Equity [Abstract]  
Stock Compensation

7. Stock Compensation

 

Shares Issued for Services

 

During the six months ended June 30, 2016 and 2015, the Company issued 23,643,000 and 10,239,170 shares of common stock respectively for consulting fees. The Company valued these shares at $4,543,170 and $1,810,876 respectively, based upon the fair value of the common stock at the dates of the agreements. The consulting fees are amortized over the contract periods which are typically between 12 and 24 months. The amortization of prepaid services totaled $1,539,928 and $3,530,894 for the six months ended June 30, 2016 and 2015.

XML 24 R14.htm IDEA: XBRL DOCUMENT v3.5.0.2
Income Taxes - Results of Operations
6 Months Ended
Jun. 30, 2016
Income Tax Disclosure [Abstract]  
Income Taxes - Results of Operations

8. Income Taxes - Results of Operations

 

There was no income tax expense reflected in the results of operations for the quarters ended June 30, 2016 and 2015 because the Company incurred a net loss in both quarters.

 

The Company has recognized no tax benefit for the losses generated for the periods through December 31, 2015. ASC Topic 740 requires that a valuation allowance be provided if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company’s ability to realize the benefit of its deferred tax asset will depend on the generation of future taxable income. Because the Company has yet to recognize revenue, we believe that the full valuation allowance should be provided.

 

The Company’s effective tax rate for fiscal years 2015 and 2013 was 0%. The Company’s tax rate can be affected by recurring items, such as tax rates in foreign jurisdictions and the relative amount of income we earn in jurisdictions. It may also be affected by discrete items that may occur in any given year, but are not consistent from year to year.

 

As of December 31, 2015, the Company has estimated federal and state income tax net operating loss (“NOL”) carry-forwards of approximately $66,500,000, which will expire in 2032-2035.

XML 25 R15.htm IDEA: XBRL DOCUMENT v3.5.0.2
Licenses and Supply Agreements
6 Months Ended
Jun. 30, 2016
Notes to Financial Statements  
Licenses and Supply Agreements

9. Licenses and Supply Agreements

 

Patent and Subsidiary Acquisition

 

The Company has not entered into any new licenses or supply agreements during quarter ending June 30, 2016. All prior licenses, supply agreements, and patents remain unchanged from the prior quarter.

XML 26 R16.htm IDEA: XBRL DOCUMENT v3.5.0.2
Commitments and Contingencies
6 Months Ended
Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

10. Commitments and Contingencies

 

Except as described below, the Company has not created any new commitments or contingency obligations during quarter ending June 30, 2016. All other prior commitments and contingent obligations remain unchanged from the prior quarter.

 

Distribution of LodonalTM in Nigeria

 

Through its wholly-owned subsidiary, TNI BioTech International, Ltd., in December 2015 the Company completed a 90-day bridging trial for the treatment of patients with HIV/AIDS. The trial consisted of a total of 150 patients of both genders between the ages of 18-60, each of whom was infected HIV/AIDS. The primary objective of this bridging trial was to confirm that LodonalTM has a beneficial effect on the immune system of immune deficient patients and that it is safe. The trial separated patients into a Control (placebo) Group and a Treatment Group (which was administered LodonalTM). The efficacy of increasing CD4 count [cell/mm3] between Day-1 and Day-90 by at least 25% was set as the criteria for demonstrating beneficial effect on the immune system. Safety was demonstrated through quality of life assessment and vitals both of which were not adversely affected. Treatment Group patients were given a daily dose of 4.5-mg/kg of Lodonal.

 

 In April 2016, the Company announced that Nigeria’s National Agency for Food and Drug Administration and Control (“NAFDAC”) had approved its LodonalTM as an over the counter, non-toxic adjunct therapy in the treatment of HIV/AIDS and immune system regulator. NAFDAC is the Nigerian agency under the Federal Ministry of Health that is responsible for regulating and controlling the manufacture, import/export, distribution, sale and use of food and drugs. The NAFDAC approval clears the way for the Company and its distribution partners to complete the registration of LodonalTM for sale in Nigeria. The Company is now in the process of completing the registration to import the drug into Nigeria

 

Contract Manufacturing Agreements

 

On May 16, 2016, the Company entered into an agreement with Complete Pharmacy and Medical Solutions, LLC (“CPMS”) to compound, package and distribute the LDN tablets, capsules and/or creams in the United States. The initial term of the agreement is three years, with the option to renew for an additional year. The agreement may be terminated by (i) mutual agreement, (ii) in the event of a breach, provided however that if the Company terminates the contract to reimburse CPMS for all unused packaging materials for the LDN, which unused packaging materials CPMS will provide to IMUN. If CPMS does not receive and ship at least 1,000 orders (prescriptions), the Company will be required to reimburse CPMS for 100% of the “ramp up costs” (defined as all costs and expenses of labor and materials related to the testing, and required FDA and other governmental documentation/approvals of test data) of providing and producing the LDN, even where the Company cancels/terminates the Agreement, which provision shall survive the cancellation/termination of this Agreement.  

 

Operating Leases

 

At June 30, 2016, the Company was a party to an agreement to lease office space in Orlando, Florida. Rent expense for the quarters ended June 30, 2016 and 2015 was $4,011 and $18,319, respectively.

 

Legal Proceedings

 

None.

XML 27 R17.htm IDEA: XBRL DOCUMENT v3.5.0.2
Subsequent Events
6 Months Ended
Jun. 30, 2016
Subsequent Events [Abstract]  
Subsequent Events

11. Subsequent Events

 

In July 2016, the Company amended the terms of a $100,000 note payable that was due of March 29, 2016. In accordance with the amendment, the amount of the note was increased to $130,000, the maturity date was extended to July 31, 2016, and the number of Company shares due on the original note was increased from 100,000 to 225,000. The note is in default.

Between July 1, 2016 and August 12, 2016, the Company repaid or amended the following notes payable through conversions of obligations into shares of the Company’s common stock as follows:

 

●  A note payable to an officer ($50,000), together with interest accrued on the note to July 14, 2016 ($3,479), was converted to equity on July 19, 2016 for 1,069,589 shares of the Company’s common stock.
   
A note payable ($175,267), together with interest accrued on the note to June 30, 2016 ($10,536), was converted to equity on July 19, 2016 for 1,235,356 shares of the Company’s common stock.
   
A note payable by Cytocom ($350,000), together with interest accrued on the note to April 1, 2016 ($11,304), was converted to equity on August 4, 2016 for 4,516,302 shares of the Company’s common stock .
   
A note payable ($60,000), together with interest accrued on the note to April 1, 2016 ($8,183), was converted to equity on August 4, 2016 for 852,292 shares of the Company’s common stock. In addition, the note holder agreed to waive future payments of his pro-rata share of two percent of the Company’s gross receipts for sales of LodonalTM in perpetuity in return for 187,500 shares of the common stock of Cytocom.
   
Two notes payable ($200,000 and $278,933), together with interest accrued on the note to April 1, 2016 ($23,606), were converted to equity on August 4, 2016 for 6,281,738 shares of the Company’s common stock.

 

 

In July 2016, the Company issued promissory notes as follows:

 

●  A note payable, dated July 5, 2016, for $50,000, paying interest at 6% per month, and maturing on October 5, 2016.
   
●  A note payable, issued on July 7, 2016, for $180,000, maturing on March 07, 2017. The Company received $150,000 upon issuance of the note. The Company must apply the consideration towards obtaining governmental approvals for the use and sale of Lodonal™ in Malawi, Africa. If the Company fails to repay the note at maturity, the holder has the right, at any time after the maturity date, at its election, to convert all or part of the outstanding and unpaid principal and accrued into shares common stock of the Company, in number equal to the dollar conversion amount divided by the lesser of $0.15 or 80% of the lowest trade price in the 25 trading days prior to the conversion.

 

In July 2016, the Company issued shares of the Company’s common stock for services as follows:

 

●  1,000,000 shares issued on July 14, 2016 as a bonus under an agreement to provide investor relations services.
   
●  200,000 shares issued on July 19, 2016 for services related to the trial of LodonalTM in Nigeria.

 

Between July 1, 2016 and August 12, 2016, the Company issued warrants as follows:

 

●  A warrant issued to Paul Akin, director, on July 1, 2016, for services as director, to purchase 1,000,000 shares of the Company’s common stock at $0.15 per share. The warrant expires on June 30, 2021.
   
●  A warrant issued to Nicholas Plotnikoff, director, on August 5, 2016, as payment for services previously rendered as director, to purchase 150,000 shares of the Company’s common stock at $0.20 per share. The warrant expires on July 28, 2021.

 

As of August 12, 2016, the Company had outstanding 220,989,592 shares of common stock.

XML 28 R18.htm IDEA: XBRL DOCUMENT v3.5.0.2
Summary of Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2016
Summary Of Significant Accounting Policies Policies  
Basis of Presentation

Basis of Presentation

 

The consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring adjustments, unless otherwise indicated) necessary to present fairly the financial position and results of operations for the periods presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2015 (including the notes thereto) set forth in Form 10-K/A.

 

The Company qualifies as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue for the year ended December 31, 2015. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.

Use of Estimates

Use of Estimates

 

The preparation of the Company’s financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from such estimates.

 

Cash, Cash Equivalents, and Short-term Investments

Cash, Cash Equivalents, and Short-Term Investments

 

The Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include bank demand deposits, marketable securities with maturities of three months or less at purchase, and money market funds that invest primarily in certificates of deposits, commercial paper and U.S. government and U.S. government agency obligations. Cash equivalents are reported at fair value.

Concentration of Credit Risk

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company is exposed to credit risk, subject to federal deposit insurance, in the event of a default by the financial institutions holding its cash and cash equivalents to the extent of amounts recorded on the balance sheets. The cash accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. At June 30, 2016, the Company has no uninsured cash balances.

Segment and Geographic Information

Segment and Geographic Information

 

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment and does not segment the business for internal reporting or decision making.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

In accordance with the reporting requirements of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 825, “Financial Instruments”, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this standard and includes this additional information in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments. Cash and cash equivalents, accounts receivable and accounts payable are accounted for at cost which approximates fair value due to the relatively short maturity of these instruments. The carrying value of notes payable also approximates fair value since they bear market rates of interest and other terms. None of these instruments are held for trading purposes.

Fair Value Measurements

Fair Value Measurements

 

The ASC Topic 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value in accordance with U.S. generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the customer’s creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time.

Property and Equipment

Property and Equipment

 

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is determined on a straight-line basis over the estimated useful lives of the assets, which generally range from three to five years. Maintenance and repairs are charged against expense as incurred. Depreciation expense for the quarters ended June 30, 2016 and June 30, 2015 was $434 and $667, respectively.

Intangible Assets

Intangible Assets

 

Costs incurred to acquire and/or develop the Company’s product licenses and patents are capitalized and amortized by straight-line methods over estimated useful lives of seven to sixteen years. Intangible assets are stated at the lower of cost or estimated fair market value. At the end of 2015, the Company determined that the unamortized carrying amount recorded for the acquisition of licenses and patents related to LDN were impaired, and recorded an impairment loss of $5,226,352. In 2014, the Company determined that the carrying amount recoded for the acquisition of licenses and patents related to MENK were impaired, and recorded an impairment loss of $9,908,477.

 

During the quarters ended June 30, 2016 and June 30, 2015, the Company did not capitalize any costs to acquire and/or develop the Company’s product licenses and patents. (See Note 10). Amortization expense for the quarters ended June 30, 2016 and June 30, 2015 was $0 and $148,059, respectively.

Impairment of Long-lived Assets

Impairment of Long-Lived Assets

 

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable as prescribed by ASC Topic 360-10-05, “Property, Plant and Equipment.” If the carrying amount of the asset, including any intangible assets associated with that asset, exceeds its estimated undiscounted net cash flow, before interest, the Company will recognize an impairment loss equal to the difference between its carrying amount and its estimated fair value. No impairment losses were recognized for the quarters ended June 30, 2016 and June 30, 2015.

Research and Development Costs

Research and Development Costs

 

Research and development costs are charged to expense as incurred and are typically comprised of salaries and benefits, pre-clinical studies, clinical trial activities, drug development and manufacturing, fees paid to consultants and other entities that conduct certain research and development activities on the Company’s behalf and third-party service fees, including clinical research organizations and investigative sites. Costs for certain development activities, such as clinical trials are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided by vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as operating expenses.

Income Taxes

Income Taxes

 

The Company follows FASB ASC Topic 740, “Income Taxes,” which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the asset will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

 

The standard addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC Topic 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. At the date of adoption, and as of December 31, 2015 and June 30, 2016, the Company does not have a liability for unrecognized tax uncertainties.

 

The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. At the end of the quarters ended June 30, 2016 and June 30, 2015, the Company had not accrued any interest or penalties related to uncertain tax positions.

Stock-Based Compensation and Issuance of Stock for Non-Cash Consideration

Stock-Based Compensation and Issuance of Stock for Non-Cash Consideration

 

The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors, including employee stock options, based on estimated fair values equaling either the market value of the shares issued or the value of consideration received, whichever is more readily determinable. The majority of the non-cash consideration pertains to services rendered by consultants and others and has been valued at the fair market value of the Company’s common stock at the date of the agreement.

 

The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC Topic 505-50, “Equity-Based Payments to Non-Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete.

Non-controlling Interest

Non-controlling Interest

 

In accordance with ASC 810, Consolidation, the Company consolidates Cytocom, Inc. The non-controlling interests in Cytocom represent the interests of outside shareholders in the equity and results of operations of Cytocom.

Net Loss Per Share

Net Loss per Share

 

Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method and the if-converted method. Dilutive common stock equivalents are comprised of common stock purchase warrants and options outstanding. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

 

A calculation of basic and diluted net loss per share follows:

 

    For the three months ended
June 30,
    For the six months ended
June 30,
 
    2016     2015     2016     2015  
Net loss per share:                        
Numerator                                
Net loss   $ (4,038,648 )   $ (2,590,645 )   $ (10,684,051 )   $ (5,496,051 )
Net loss attributed to Common stockholders   $ (3,928,719 )   $ (2,451,754 )   $ (10,530,002 )   $ (5,233,095 )
                                 
Denominator                                
Weighted-average common shares outstanding—                                
Denominator for basic and diluted net loss per share     207,229,469       147,387,763       199,076,428       142,563,007  
Basic and diluted net loss per share attributed                                
 to common stockholders   $ (0.02 )   $ (0.02 )   $ (0.05 )   $ (0.04 )

 

The Company’s potential dilutive securities which include stock, stock warrants and convertible debt have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average Common stock outstanding used to calculate both basic and diluted net loss per share is the same.

The following shares of potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as the effect of including such securities would be antidilutive:

  

    As of June 30,  
    2016     2015  
Warrants to purchase Common stock     32,748,908       9,372,750  
      32,748,908       9,372,750  

 

Recent Accounting Standards

Recent Accounting Standards

 

During the quarter ended June 30, 2016, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

 

The Company qualifies as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue and did not have such amount as of December 31, 2015, our last fiscal year. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.

XML 29 R19.htm IDEA: XBRL DOCUMENT v3.5.0.2
Summary of Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2016
Summary Of Significant Accounting Policies Tables  
Schedule of Basic and Diluted Net Loss Per Share

A calculation of basic and diluted net loss per share follows:

 

    For the three months ended
June 30,
    For the six months ended
June 30,
 
    2016     2015     2016     2015  
Net loss per share:                        
Numerator                                
Net loss   $ (4,038,648 )   $ (2,590,645 )   $ (10,684,051 )   $ (5,496,051 )
Net loss attributed to Common stockholders   $ (3,928,719 )   $ (2,451,754 )   $ (10,530,002 )   $ (5,233,095 )
                                 
Denominator                                
Weighted-average common shares outstanding—                                
Denominator for basic and diluted net loss per share     207,229,469       147,387,763       199,076,428       142,563,007  
Basic and diluted net loss per share attributed                                
 to common stockholders   $ (0.02 )   $ (0.02 )   $ (0.05 )   $ (0.04 )

 

Schedule of Antidilutive Securities

The following shares of potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as the effect of including such securities would be antidilutive:

  

    As of June 30,  
    2016     2015  
Warrants to purchase Common stock     32,748,908       9,372,750  
      32,748,908       9,372,750  

 

XML 30 R20.htm IDEA: XBRL DOCUMENT v3.5.0.2
Property and Equipment (Tables)
6 Months Ended
Jun. 30, 2016
Property And Equipment Tables  
Schedule of Property and Equipment

    June 30, 2016     December 31, 2015  
Property and equipment:                
Computer equipment   $ 8,013     $ 8,013  
                 
Less accumulated depreciation     (7,312 )     (6,331 )
                 
Property and equipment, net   $ 701     $ 1,682  

 

XML 31 R21.htm IDEA: XBRL DOCUMENT v3.5.0.2
Accrued Liabilities (Tables)
6 Months Ended
Jun. 30, 2016
Accrued Liabilities Tables  
Schedule of Accrued Liabilities

Accrued expenses and other liabilities consist of the following:

 

    June 30, 2016     December 31, 2015  
    (in thousands)  
Accrued payroll to officers and others   $ 1,013     $ 758  
Accrued interest and penalties - notes payable     843       237  
Accrued legal settlements     174       282  
Other accrued liabilities     1       4  
Total accrued expenses and other liabilities   $ 2,031     $ 1,281  

 

XML 32 R22.htm IDEA: XBRL DOCUMENT v3.5.0.2
Notes Payable (Tables)
6 Months Ended
Jun. 30, 2016
Notes Payable Tables  
Schedule of Notes Payable

Notes payable consist of the following:

     June 30, 2016      December 31, 2015  
Promissory note issued July 29, 2014 to Ira Gaines. The note matures on January 27, 2015 and earns interest at a rate of 18% per annum. The Company was unable to repay the note at maturity and the note is in default, although no demand for repayment has been made by the lender.   $ 100,000     $ 100,000  
                 
Promissory notes issued between November 26, 2014 and September 30, 2015, to raise up to $2,000,000 in debt. Lenders earn interest at a rate of 10% per annum, plus a pro-rata share of two percent of the Company’s gross receipts for sales of IRT-103-LDN in perpetuity. Notes will be repaid in 36 monthly installments of principal and interest commencing no later than October 15, 2015. Notes aggregating $346,000 were in default at June 30, 2015, as the Company was unable to pay installments on those notes on their due dates. No demands for repayment have been made by the lenders. One of these notes ($60,000), together with interest accrued on the note to March 31, 2016 ($8,183), was converted to equity on August 4, 2016 for 852,292 shares of the Company’s common stock. In addition, the note holder agreed to waive future payments of his pro-rata share of two percent of the Company’s gross receipts for sales of LodonalTM in perpetuity in return for 187,500 shares of the common stock of Cytocom.     346,000       711,500  
                 
Promissory note issued October 17, 2014 to Roger Bozarth. The note matures on October 17, 2015 and earns interest at a rate of 2% per annum. The Company was unable to repay the note at maturity and the note is in default, although no demand for repayment has been made by the lender.     -       7,000  
                 
Promissory notes issued between May 1, 2015 and June 30, 2016, and maturing between June 14, 2015 and June 30, 2017. Lenders on loans aggregating $834,927 earn interest at rates between 10% and 18% per annum. On loans aggregating $198,500, interest is payable in a fixed amount not tied to a specific interest rate. One of these notes ($278,933), together with interest accrued to April 1, 2016 ($18,888), was converted on August 4, 2016 to 3,722,013 shares of the Company’s common stock. Notes aggregating $223,500 were in default at June 30, 2016, as the Company was unable to repay those notes on their due dates. No demands for repayment have been made by the lenders.     1,033,427       669,933  
                 
Promissory note issued January 26, 2015 to Robert J. Dailey. The note is senior to, and has priority in right of payment over, all indebtedness of the Company. The note earns interest at a rate of 2% per annum and was due on July 30, 2015. The Company was unable to repay the note at maturity and the note is in default, although no demand for repayment has been made by the lender. This note, together with interest accrued to April 1, 2016 ($4,778), was converted on August 4, 2016 to 2,559,725 shares of the Company’s common stock.     200,000       200,000  
                 
Promissory notes issued by Cytocom Inc. between April 29, 2015 and December 31, 2015. Lenders earn interest at rates between 5% and 10% per annum. These notes mature on September 30, 2016. One of these notes ($350,000), together with interest accrued on the note to March 31, 2016 ($11,304), was converted to equity on August 4, 2016 for 4,516,302 shares of the Company’s common stock.     775,000       800,000  
                 
Promissory notes issued in December 2015. Lenders earn interest at a rate of 10% per month. Notes are repayable on March 9, 2016. The Company was unable to repay the note at maturity and the note is in default. The Company is obligated to pay late-payment penalties totaling $5,000 per day.     100,000       130,000  
                 
Promissory note issued November 24, 2015 as settlement of amounts owing to a law firm. The Lender earns interest at the rate of 10% per annum. The note is repayable in full on December 1, 2016. This note, together with interest accrued on the note to July 19, 2016 ($10,536), was converted to equity on July 19, 2016 for 1,235,356 shares of the Company’s common stock.     175,268       175,268  
                 
Promissory notes issued between April 6, 2016 and June 2, 2016 that mature between October 1, 2016 and January 31, 2017, and include stock conversion features, warrants and original issue debt discounts.     1,161,250       -  
                 
Promissory notes issued to an officer of the Company effective November 3, 2015 and maturing November 3, 2016 for settlement of accrued payroll, bearing interest at 10% per annum and including a stock conversion feature. One of these notes ($50,000), together with interest accrued on the note to July 19, 2016 ($3,479), was converted to equity on July 19, 2016 for 1,069,589 shares of the Company’s common stock.     162,737       -  
                 
Less: Original issue discounts on notes payable and warrants issued with notes.     (596,246 )     -  
                 
Total     3,457,436       2,793,701  
                 
Less: Current Portion   $ (3,457,436 )   $ (2,793,701 )
                 
Long-Term debt, less current portion   $ -     $ -  

 

As of June 30, 2016, the Company had accrued $843 in unpaid interest, compared to $236,671 as of December 31, 2015. These amounts included default of penalties of $581,324 at June 30, 2016, compared to $18,954 at December 31, 2015. During the six months ended June 30, 2016, 896,296 shares with a fair value of $149,000 were issued by the Company for interest expense under promissory notes.

XML 33 R23.htm IDEA: XBRL DOCUMENT v3.5.0.2
Capital Structure - Common Stock and Common Stock Purchase Warrants (Tables)
6 Months Ended
Jun. 30, 2016
Capital Structure - Common Stock And Common Stock Purchase Warrants Tables  
Schedule of Outstanding Stock Warrants

Following is a summary of outstanding stock warrants at June 30, 2016 and activity during the six months then ended:

 

    Number of Shares     Exercise Price     Weighted Average Price  
                   
Warrants as of December 31, 2015     9,131,500        $ 0.07-15.00     $ 1.47  
                         
Issued in 2016     23,654,908        $ 0.14-2.00     $ 0.32  
                         
Expired     (37,500 )   $ 5.00     $ 5.00  
                         
Exercised     (0 )   $ 0     $ 0  
                         
Warrants as of June 30, 2016     32,748,908     $   0.07-15.00     $ 0.54  

 

Summary of Outstanding Warrants

Summary of outstanding warrants as of June 30, 2016:

 

Expiration Date   Number of
Shares
    Exercise
Price
    Remaining
Life (years)
 
                   
Third Quarter 2016     125,000     $ 5.00       .25  
Fourth Quarter 2017     350,000       1.50-9.00       1.50  
First Quarter 2018     127,500     $ 15.00       1.75  
Second Quarter 2018     33,334     $ 15.00       2.00  
Third Quarter 2018     250,000     $ 1.50       2.25  
Fourth Quarter 2018     6,089,166     $ 1.00-1.50       2.50  
First Quarter 2019     4,024,000     $ 0.50-2.00       2.75  
Second Quarter 2019     135,000     $ 0.07–0.23       3.00  
Third Quarter 2019     260,000     $ 0.50-1.50       3.25  
Fourth Quarter 2019     400,000     $ 0.14       3.50  
Second Quarter 2020     300,000     $ 0.50       4.00  
Third Quarter 2020     1,000,000     $ 0.20       4.25  
Fourth Quarter 2020     12,650,000     $ 0.20       4.50  
First Quarter 2021     7,004,908     $ 0.10-0.20       4.75  

 

XML 34 R24.htm IDEA: XBRL DOCUMENT v3.5.0.2
Organization and Description of Business (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended
Dec. 08, 2014
Jun. 30, 2014
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Dec. 31, 2015
Net loss     $ 4,038,648 $ 2,590,645 $ 10,684,051 $ 5,496,051  
Cash equivalents     1,399,729   1,399,729    
Stockholders equity     $ 6,926,660   $ 6,926,660   $ 5,958,184
Cytocom Inc., [Member]              
Number of shares issued druing period 113,242,522           140,100,000
Percentage of stake issued during period 55.30%           41.00%
Irish Limited Liability [Member]              
Percentage of low corporate income tax rate   12.50%          
XML 35 R25.htm IDEA: XBRL DOCUMENT v3.5.0.2
Summary of Significant Accounting Policies (Details Narrative) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Dec. 31, 2015
Dec. 31, 2014
Maximum of annual gross revenue     $ 1,000,000,000  
Federal deposit insurance corporation value $ 250,000      
Depreciation expense 981 $ 1,335    
Amortization expense 0 148,059    
Impairment loss    
LDN [Member]        
Impairment loss     $ 5,226,352  
MENK [Member]        
Impairment loss       $ 9,908,477
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.5.0.2
Summary of Significant Accounting Policies - Schedule of Basic and Diluted Net Loss Per Share (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Summary Of Significant Accounting Policies - Schedule Of Basic And Diluted Net Loss Per Share Details        
Numerator, Net loss $ (4,038,648) $ (2,590,645) $ (10,684,051) $ (5,496,051)
Numerator, Net loss attributed to Common stockholders $ (3,928,719) $ (2,451,754) $ (10,530,002) $ (5,233,095)
Denominator, Weighted-average common shares outstanding-Denominator for basic and diluted net loss per share 207,229,469 147,387,763 199,076,428 142,563,007
Denominator, Basic and diluted net loss per share attributed to common stockholders $ (0.02) $ (0.02) $ (0.05) $ (0.04)
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.5.0.2
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities (Details) - shares
6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Summary Of Significant Accounting Policies - Schedule Of Basic And Diluted Net Loss Per Share Details    
Warrants to purchase Common stock 32,748,908 9,372,750
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.5.0.2
Property and Equipment (Details Narrative)
6 Months Ended
Jun. 30, 2016
Property And Equipment Details Narrative  
Depreciable asset lives 5 years
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.5.0.2
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)
Jun. 30, 2016
Dec. 31, 2015
Property And Equipment - Schedule Of Property And Equipment Details    
Computer equipment $ 8,013 $ 8,013
Less accumulated depreciation (7,312) (6,331)
Property and equipment, net $ 701 $ 1,682
XML 40 R30.htm IDEA: XBRL DOCUMENT v3.5.0.2
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($)
Jun. 30, 2016
Dec. 31, 2015
Accrued Liabilities - Schedule Of Accrued Liabilities Details    
Accrued payroll to officers and others $ 1,013,000 $ 758,000
Accrued interest and penalties - notes payable 843,000 237,000
Accrued legal settlements 174,000 282,000
Other accrued liabilities 1,000 4,000
Total accrued expenses and other liabilities $ 2,031,000 $ 1,281,000
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.5.0.2
Notes Payable (Details Narrative) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2016
Dec. 31, 2015
Notes Payable Details Narrative    
Accrued unpaid interest $ 843,275 $ 236,671
Penalties $ 581,324 $ 18,954
Issuance of common stock for interest expense,shares 896,296  
Issuance of common stock for interest expense $ 149,000  
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.5.0.2
Notes Payable - Schedule of Notes Payable (Details) - USD ($)
Jun. 30, 2016
Dec. 31, 2015
Total $ 3,457,436 $ 2,793,701
Less: Original issue discounts on notes payable and warrants issued with notes (596,246)
Less: Current portion (3,457,436) (2,793,701)
Long-Term debt, less current portion
Notes Payable One [Member]    
Total 100,000 100,000
Notes Payable Two [Member]    
Total 346,000 711,500
Notes Payable Three [Member]    
Total 7,000
Notes Payable Four [Member]    
Total 1,033,427 669,933
Notes Payable Five [Member]    
Total 200,000 200,000
Notes Payable Six [Member]    
Total 775,000 800,000
Notes Payable Seven [Member]    
Total 100,000 130,000
Notes Payable Eight [Member]    
Total 175,268 175,268
Notes Payable Nine [Member]    
Total 1,161,250
Notes Payable Ten [Member]    
Total $ 162,737
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.5.0.2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical)
1 Months Ended 6 Months Ended 10 Months Ended
Nov. 24, 2015
USD ($)
shares
Nov. 03, 2015
USD ($)
shares
Sep. 30, 2015
USD ($)
shares
Jan. 26, 2015
USD ($)
shares
Oct. 17, 2014
Jul. 29, 2014
Dec. 31, 2015
USD ($)
Jun. 30, 2015
USD ($)
shares
Sep. 30, 2015
USD ($)
Installments
Aug. 04, 2016
USD ($)
Jun. 30, 2016
USD ($)
Apr. 02, 2016
USD ($)
Mar. 31, 2016
USD ($)
Percentage of interest rate per annum   10.00% 10.00%           10.00%        
Maximum amount raise in debt     $ 2,000,000           $ 2,000,000        
Number of installments, months | Installments                 36        
Accrued interest   $ 3,479               $ 8,183   $ 18,828 $ 60,000
Value of notes that converted into shares   $ 50,000                      
Notes and interest converted into shares | shares   1,069,589                      
Cytocom Inc., [Member]                          
Note matures date               Sep. 30, 2016          
Value of notes that converted into shares               $ 350,000          
Notes and interest converted into shares | shares               4,516,302          
Minimum [Member] | Cytocom Inc., [Member]                          
Percentage of interest rate per annum                     5.00%    
Maximum [Member] | Cytocom Inc., [Member]                          
Percentage of interest rate per annum                     10.00%    
Ira Gaines [Member]                          
Note matures date           Jan. 27, 2015              
Percentage of interest rate per annum           18.00%              
Lenders [Member]                          
Notes aggregating default amount                     $ 346,000    
Value of notes that converted into shares     $ 278,933                    
Notes and interest converted into shares | shares     3,722,013                    
Aggregating loan     $ 834,888           $ 834,888        
Interest payable     $ 198,500           $ 198,500        
Lenders [Member] | Minimum [Member]                          
Percentage of interest rate per annum     10.00%           10.00%        
Lenders [Member] | Maximum [Member]                          
Percentage of interest rate per annum     18.00%           18.00%        
Roger Bozarth [Member]                          
Note matures date         Oct. 17, 2015                
Percentage of interest rate per annum         2.00%                
Lenders [Member]                          
Notes aggregating default amount                     $ 198,500    
Robert J. Dailey [Member]                          
Note matures date       Jul. 30, 2015                  
Percentage of interest rate per annum       2.00%                  
Accrued interest       $ 4,778                  
Notes and interest converted into shares | shares       2,559,725                  
Lender [Member]                          
Note matures date             Mar. 09, 2016            
Percentage of interest rate per annum             10.00%            
Accrued interest             $ 11,304            
Pay late-payment penalties per day             $ 5,000            
Lender [Member]                          
Note matures date Dec. 01, 2016                        
Percentage of interest rate per annum 10.00%                        
Value of notes that converted into shares $ 10,536                        
Notes and interest converted into shares | shares 1,235,356                        
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.5.0.2
Capital Structure - Common Stock and Common Stock Purchase Warrants (Details Narrative) - $ / shares
6 Months Ended
Jun. 30, 2016
Dec. 31, 2015
Jun. 30, 2015
Common Stock, Par Value $ 0.0001 $ 0.0001 $ 0.0001
Common Stock, Shares Authorized 500,000,000 500,000,000 500,000,000
Common Stock, Shares Issued 214,447,611 174,850,047  
Common Stock, Shares Outstanding 214,447,611 174,850,047  
Number of warrants issued during period 23,654,908    
Warrant maturity date Dec. 31, 2018    
Number of existing warrant issued shares 5,006,666    
Warrant Expiry date Jul. 25, 2016    
Warrant extented date Dec. 17, 2018    
Minimum [Member]      
Warrant term 3 years    
Warrants exercise price per share $ 0.75    
Maximum [Member]      
Warrant term 5 years    
Warrants exercise price per share $ 1.00    
XML 45 R35.htm IDEA: XBRL DOCUMENT v3.5.0.2
Capital Structure - Common Stock and Common Stock Purchase Warrants - Schedule of Outstanding Stock Warrants (Details) - Warrant [Member]
6 Months Ended
Jun. 30, 2016
$ / shares
shares
Warrants, Number of shares Beginning balance | shares 9,131,500
Warrants, Number of shares Issued | shares 23,654,908
Warrants, Number of shares Expired | shares (37,500)
Warrants, Number of shares Exercised | shares 0
Warrants, Number of shares Ending balance | shares 32,748,908
Exercise Price, Expired $ 5.00
Exercise Price, Exercised 0
Weighted average exercise price, Beginning balance 1.47
Weighted average exercise price, Issued 0.32
Weighted average exercise price, Expired 5.00
Weighted average exercise price, Exercised 0
Weighted average exercise price, Ending balance 0.54
Minimum [Member]  
Exercise Price, Beginning balance 0.07
Exercise Price, Issued 0.14
Exercise Price, Ending balance 0.07
Maximum [Member]  
Exercise Price, Beginning balance 15.00
Exercise Price, Issued 2.00
Exercise Price, Ending balance $ 15.00
XML 46 R36.htm IDEA: XBRL DOCUMENT v3.5.0.2
Capital Structure - Common Stock and Common Stock Purchase Warrants - Summary of Outstanding Warrants (Details)
6 Months Ended
Jun. 30, 2016
$ / shares
shares
Third Quarter 2016 [Member]  
Number of Shares | shares 125,000
Exercise Price Lower Limit $ 5.00
Remaining Life (years) 3 months
Fourth Quarter 2017 [Member]  
Number of Shares | shares 350,000
Exercise Price Lower Limit $ 1.50
Exercise Price Upper Limit $ 9.00
Remaining Life (years) 1 year 6 months
First Quarter 2018 [Member]  
Number of Shares | shares 127,500
Exercise Price Lower Limit $ 15.00
Remaining Life (years) 1 year 9 months
Second Quarter 2018 [Member]  
Number of Shares | shares 33,334
Exercise Price Lower Limit $ 15.00
Remaining Life (years) 2 years
Third Quarter 2018 [Member]  
Number of Shares | shares 250,000
Exercise Price Lower Limit $ 1.50
Remaining Life (years) 2 years 3 months
Fourth Quarter 2018 [Member]  
Number of Shares | shares 6,089,166
Exercise Price Lower Limit $ 1.00
Exercise Price Upper Limit $ 1.50
Remaining Life (years) 2 years 6 months
First Quarter 2019 [Member]  
Number of Shares | shares 4,024,000
Exercise Price Lower Limit $ 0.50
Exercise Price Upper Limit $ 2.00
Remaining Life (years) 2 years 9 months
Second Quarter 2019 [Member]  
Number of Shares | shares 135,000
Exercise Price Lower Limit $ 0.07
Exercise Price Upper Limit $ 0.23
Remaining Life (years) 3 years
Third Quarter 2019 [Member]  
Number of Shares | shares 260,000
Exercise Price Lower Limit $ 0.50
Exercise Price Upper Limit $ 1.50
Remaining Life (years) 3 years 3 months
Fourth Quarter 2019 [Member]  
Number of Shares | shares 400,000
Exercise Price Lower Limit $ 0.14
Remaining Life (years) 3 years 6 months
Second Quarter 2020 [Member]  
Number of Shares | shares 300,000
Exercise Price Lower Limit $ 0.50
Remaining Life (years) 4 years
Third Quarter 2020 [Member]  
Number of Shares | shares 1,000,000
Exercise Price Lower Limit $ 0.20
Remaining Life (years) 4 years 3 months
Fourth Quarter 2020 [Member]  
Number of Shares | shares 12,650,000
Exercise Price Lower Limit $ 0.20
Remaining Life (years) 4 years 6 months
First Quarter 2021 [Member]  
Number of Shares | shares 7,004,908
Exercise Price Lower Limit $ 0.10
Exercise Price Upper Limit $ 0.20
Remaining Life (years) 4 years 9 months
XML 47 R37.htm IDEA: XBRL DOCUMENT v3.5.0.2
Stock Compensation (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Number of common stock issued for consulting fees 23,643,000 10,239,170
Fair value of common stock $ 4,543,170 $ 1,810,876
Amortization of prepaid services $ 1,539,928 $ 3,530,894
Minimum [Member]    
Consulting fees amortized period 12 months  
Maximum [Member]    
Consulting fees amortized period 24 months  
XML 48 R38.htm IDEA: XBRL DOCUMENT v3.5.0.2
Income Taxes - Results of Operations (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2013
Income Taxes - Results Of Operations Details Narrative    
Effective tax rate 0.00% 0.00%
Deferred tax assets  
Operating loss carryforwards $ 66,500,000  
Operating loss carryforwards expire term expire in 2032-2035.  
XML 49 R39.htm IDEA: XBRL DOCUMENT v3.5.0.2
Commitments and Contingencies (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Initial supply, description Through its wholly-owned subsidiary, TNI BioTech International, Ltd., in December 2015 the Company completed a 90-day bridging trial for the treatment of patients with HIV/AIDS. The trial consisted of a total of 150 patients of both genders between the ages of 18-60, each of whom was infected HIV/AIDS. The primary objective of this bridging trial was to confirm that LodonalTM has a beneficial effect on the immune system of immune deficient patients and that it is safe. The trial separated patients into a Control (placebo) Group and a Treatment Group (which was administered LodonalTM). The efficacy of increasing CD4 count [cell/mm3] between Day-1 and Day-90 by at least 25% was set as the criteria for demonstrating beneficial effect on the immune system. Safety was demonstrated through quality of life assessment and vitals both of which were not adversely affected. Treatment Group patients were given a daily dose of 4.5-mg/kg of Lodonal.  
Initial capital to venture $ 1,000  
Percentage of allocated income from venture 25.00%  
Orlando, Florida [Member]    
Cash rental expense $ 4,011 $ 18,319
Complete Pharmacy and Medical Solutions, LLC [Member]    
Percentage of allocated income from venture 100.00%  
XML 50 R40.htm IDEA: XBRL DOCUMENT v3.5.0.2
Subsequent Events (Details Narrative) - USD ($)
1 Months Ended 6 Months Ended
Aug. 06, 2016
Jul. 19, 2016
Jul. 14, 2016
Jul. 07, 2016
Jul. 02, 2016
Jul. 31, 2016
Jun. 30, 2016
Jun. 30, 2015
Aug. 12, 2016
Dec. 31, 2015
Nov. 03, 2015
Sep. 30, 2015
Notes payable                    
Notes interest rate percentage                     10.00% 10.00%
Shares issued for service, shares             23,643,000 10,239,170        
Common Stock, Shares Outstanding             214,447,611     174,850,047    
Subsequent Event [Member]                        
Notes payable           $ 100,000            
Notes due date           Mar. 29, 2016            
Change in notes payable           $ 130,000            
Shares issued for service, shares   200,000 1,000,000                  
Common Stock, Shares Outstanding                 220,989,592      
Subsequent Event [Member] | Paul Akin [Member]                        
Notes due date         Jun. 30, 2021              
Number of warrants issued         1,000,000              
Exercise price of warrant         $ 0.15              
Subsequent Event [Member] | Nicholas Plotnikoff [Member]                        
Notes due date Jul. 28, 2021                      
Number of warrants issued 150,000                      
Exercise price of warrant $ 0.20                      
Subsequent Event [Member] | Notes Payable One [Member]                        
Notes payable           50,000            
Interest accrued           $ 3,479            
Number of stock issued for debt conversion           1,069,589            
Subsequent Event [Member] | Notes Payable Two [Member]                        
Notes payable           $ 175,267            
Interest accrued           $ 10,536            
Number of stock issued for debt conversion           1,235,356            
Subsequent Event [Member] | Notes Payable Three [Member]                        
Notes payable           $ 350,000            
Interest accrued           $ 11,304            
Number of stock issued for debt conversion           4,516,302            
Subsequent Event [Member] | Notes Payable Four [Member]                        
Notes payable           $ 60,000            
Interest accrued           $ 8,183            
Number of stock issued for debt conversion           852,292            
Subsequent Event [Member] | Notes Payable Five [Member]                        
Notes payable           $ 200,000            
Subsequent Event [Member] | Notes Payable Six [Member]                        
Notes payable           278,933            
Subsequent Event [Member] | Notes Payable Five and Six [Member]                        
Interest accrued           $ 23,606            
Number of stock issued for debt conversion           6,281,738            
Subsequent Event [Member] | Promissory Notes One [Member]                        
Notes payable           $ 50,000            
Notes due date           Oct. 05, 2016            
Notes interest rate percentage           6.00%            
Subsequent Event [Member] | Promissory Notes Two [Member]                        
Notes payable       $ 180,000                
Notes due date       Mar. 07, 2017                
Notes interest rate percentage       15.00%                
Proceeds fom notes payable       $ 150,000                
Convertible threshold percentage       80.00%                
Subsequent Event [Member] | Minimum [Member]                        
Interest accrued           $ 100,000            
Subsequent Event [Member] | Maximum [Member]                        
Interest accrued           $ 225,000            
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